Top 5 and bottom 5 Club stocks between the S&P 500's old June low and Monday's new one

Published Tue, Sep 27 202212:44 PM EDTUpdated Tue, Sep 27 20221:18 PM EDT

Kevin Stankiewicz @in/kevin-stankiewicz-b5593466 @kevin_stank

Stocks turned lower Tuesday, one day after the S & P 500 registered its lowest close of the year, which was also the lowest close since December 2020. The broad equity index on Monday closed at 3,655.04 and erasing all the gains it recorded during a summer rally and then some. Before Monday's finish, the index's June 16 close of 3,666.77 had served as the market bottom in a turbulent year replete with challenges: surging inflation, increasingly hawkish central banks, Russia's war in Ukraine, rolling Covid lockdowns in China and more. While the market is in extreme oversold territory, it's impossible to predict where Wall Street will go next. However, to help make sense of where the market's been over the past 3½ months, we're highlighting the five best-performing stocks between June 16 and Monday, as well as the worst-performing names during that stretch. We're focusing only on the 33 stocks in Jim Cramer's Charitable Trust as of Monday's close. The Trust is portfolio we use for the Club. Walmart (WMT) and Chevron (CVX) were in the Trust on June 16, but we exited those stocks Aug. 1 and Sept. 7 , respectively. On the other hand, Starbucks (SBUX) and off-price retailer TJX Companies (TJX) entered the portfolio Aug. 22 and Aug. 24 , respectively. This means a large chunk of their moves between June 16 and Monday took place when they were outside of the portfolio. We included them in the analysis, though, because that trading history is relevant in understanding where the stock could go from here. Top performers Leading the way was Wynn Resorts (WYNN) , gaining 22.6% between the old June low and Monday. More than half the gain came Monday, as shares jumped $7.15 apiece, or 12%, to close at $66.80. Even if the stock finished unchanged Monday, at $59.65 per share, its gain would've been a very solid 9.3%. The reason for Monday's surge in WYNN: Tour groups from mainland China are set to be welcomed back to the gaming hub of Macao, beginning in November, according to the city's chief executive . The highly restrictive visitation policies that have been in place during the Covid pandemic have crushed casino operators in the Chinese special administrative region, including Wynn Resorts. It's no surprise investors responded so enthusiastically to reports that tour groups could be back soon. We've been holding onto a small position in Wynn due to our belief that, eventually, authorities in China would ease of some strict pandemic policies and materially improve the financial outlook for the company. While we've taken pain in Wynn at other times, the stock's strong performance lately shows why we've been willing to be patient. Up next is Starbucks , which saw its stock price rise 19.5% between June 16 and Monday. As we noted above, we've only owned SBUX shares for roughly a month. We started with 275 shares and built the position up to 675 shares, as of Monday. On paper, we have a slight unrealized gain in Starbucks — about 0.55% — since our first buy Aug. 22. The S & P 500, however, is down more than 11% in the same timeframe. In a broad sense, what's happened is that Starbucks shares rode the bullish summer wave that crested Aug. 16 and have stayed relatively resilient even as the overall market turned south again. Starbucks bucked the market's downward trend with its own investor day-related rally , and while it's given back all of those gains, the stock has been able to hold up decently. It closed June 16 at $70.95 per share and settled at $84.81 on Monday. Nothing has changed in our investment thesis over the past month. If anything, management's presentations during the September investor bolstered our confidence in the reinvention plan and so has the choice of experienced consumer-focused leader Laxman Narasimhan as CEO to take over for Howard Schultz. Apple (AAPL) is our third-best performer, advancing 15.92% between June 16 and Monday. Shares of the iPhone maker helped propel the market higher during its summer rally — posting seven positive weeks out of eight and advancing 33% overall from the old June bottom to the mid-August peak, on Aug. 16. Apple has the largest weighting in the S & P 500, at over 7%. In the Club portfolio, it also has the heaviest weighting at over 5.5%. The stock's massive move played a role in what we saw at the index level on the way up. We also are seeing it on the way back down, although AAPL shares slightly outperformed the S & P since Aug. 16, declining nearly 13% compared with the index's slide of roughly 15%. It's fair to suggest Apple shares may have gotten ahead of themselves during the summer rally, at one point reaching a forward price-to-earnings multiple around 27, which roughly matches its highest valuation this year. That's not surprising for us to say, necessarily. After all, we saw signs that the market had become overbought during the rebound and decided it was time to start paring back some winners — including a number of tech names that had been helped by the temporarily retreating 10-year Treasury yield . Our pivot to raising cash has proven well-timed, as we've had ample dry power to opportunistically deploy into weakness. Between the old June low and Monday, Apple debuted its latest hardware lineup : various iPhone 14 models, improved AirPods Pro and a slate of Apple Watch models. This could also explain some of the stock's rapid rise, as shares tend to outperform in the run-up to product announcements. While early indications point to strong demand for the high-end iPhones , time will tell us how consumers will respond to the entire new product lineup of Apple products. We always say "own Apple, don't trade it," so we can afford to be patient. Our fourth-best performer is Humana (HUM), advancing 14.04% over the nearly 3½-month time window in focus. In addition to general market sentiment improving, a number a Humana-specific developments in between the old June low and Monday helped advanced the company's shares. On Sept. 15, for example, the stock had a great day, jumping 8.4% to close at $497.24, as the market cheered an upbeat forecast issued by management during an investor day . On Sept. 20, shares set an intraday all-time high of $514.98, after a JPMorgan analyst upgraded HUM to the equivalent of a buy from hold. The stock did pare much of those gains later in the session, though. Humana in recent days has cooled off with the market, but we see plenty of reasons to stick with it: defensive characteristics as a health insurer, its 1 00% domestic revenue minimizes the impact of strong U.S. dollar and its Medicare Advantage business appears to have regained its footing. Amazon (AMZN) is the Club's fifth-best performer , gaining 11.08% between June 16 and Monday. While that's definitely a solid performance, shares have fallen considerably in recent weeks. At the apex of the summer rally, Amazon shares had soared 39.67% since the old June low, among the 20 best stocks in the S & P 500 over that stretch. A strong earnings report after the close July 28 added rocket fuel to a rebound that had already started to take hold. Amazon has the third-largest weighting in the S & P 500 (only a 3.2% in the Club portfolio). So similarly with Apple, its fortunes have an outsized impact on the overall index. The retreat of the 10-year Treasury yield between mid-June and the most recent top in August — tumbling from nearly 3.5% to roughly 2.6% — certainly helped Amazon in its march higher. Likewise, the surge in bond yields since mid-August is weighing on the cloud and ecommerce giant. Higher bond yields make future growth less valuable today . We take the long view with Amazon, so the stock's slump in recent weeks — down some 20% — presents a buying opportunity. We took advantage of it Monday, picking up 75 shares of Amazon . The stocks that sit just outside the top 5 include Danaher (DHR) and Morgan Stanley (MS), which rose 9.06% and 7.86%, respectively, between June 16 and Monday. Worst performers Our worst-performing stock was Haliburton (HAL), which tumbled 30.36% between the old June low and Monday. The big drag on HAL over the stretch: a steep, but steady decline in oil prices. West Texas Intermediate crude , the U.S. oil benchmark, traded around $120 a barrel in early June. On Monday, it settled below $77 per barrel. Plummeting oil prices is good in the battle against inflation. However, some of the decline was driven by concerns of weaker demand in a slowing economy — not exactly great for an oilfield services company like Halliburton, which benefits from an increase in drilling. It's important to draw a distinction between the market's interpretation and what management says. In July, when HAL reported better-than-expected Q2 earnings , the company said it expected a "multiyear energy upcycle," supported by a number of fundamental trends like renewed focus on energy independence following Russia's invasion of Ukraine. Energy has become a situation where sentiment has largely become disconnected from fundamentals. Our second-biggest loser was Nvidia (NVDA), which fell 21.62% between June 16 and Monday. Nvidia had actually been a solid gainer from mid-June into August, but the company's brutal earnings preannouncement on Aug. 8 began to take the wind out of its sails. Then the overall sentiment began to turn negative. On Aug. 26, the stock sold off 9.23% — two days after it officially reported those preannounced second-quarter results. That was the first of seven-straight negative sessions for the stock in which it lost around 28% in total. In the midst of that losing streak, we got news about the U.S. government restricting some of Nvidia's chip exports to China over concern they could be used by the Chinese military. It also added insult to the gaming slowdown injury. It's no doubt been a rough patch for Nvidia, but we still see long-term secular trends on its side. In the near term, the upcoming launch of its new gaming chips could be the start of that business getting back on track . Advanced Micro Devices (AMD) was next , falling 19.20% between the old June low and Monday's new one. Shares had actually remained in positive territory since the June low all the way into September — albeit slightly — before its slide accelerated. In the 17 trading days between Sept. 1 and Monday, AMD shares finished higher just five times. We know AMD is out of favor right now, but we remain confident in the company when looking at the big picture. Some of the weakness in gaming that's hurt Nvidia has weighed on AMD, too. However, AMD is increasingly less reliant on consumer end markets to grow, a key reason we like the company long term. In recent months, we've only grown more confident that AMD has out-innovated and out-executed Intel (INTC) to grow its share in data-center chips. AMD has said the U.S. chip restrictions around China would have only a minimal impact. Our fourth-worst performer was Meta Platforms (META) , which dropped 15.23% between June 16 and Monday. It's been a rough year for the stock overall, and it returned to its losing ways after back-to-back winning weeks in August. Since then, Meta shares have fallen in five of six weeks. While Meta still needs to demonstrate an ability to monetize the immersive digital world known as the metaverse it's investing heavily to develop, our near-term attitude toward the company has turned more constructive. Part of the reason for the shift is news about management's plans to cut costs . That should deliver some support to earnings during a softer period for digital ad sales. Pioneer Natural Resources (PXD) saw the fifth-largest decline among portfolio stocks, declining 14.94% between the old June low and Monday. The decline in oil prices we discussed above with Halliburton served as the biggest drag on PXD shares, too. We continue to own Pioneer — along with our other oil producers — to help hedge our portfolio against inflation. However, we've worked to pare back our exposure in recent weeks and ultimately made some timely trims of PXD into strength. Our three separate sales came at the average selling prices of $257.42, $265.28 and $253.87. On Monday, the stock closed all the way down at $205.41 per share, which is 19.4% below the last of those three sales, on Aug. 31. We still own 125 shares of Pioneer, so we haven't completely escaped the stock's recent decline. However, our discipline prompted us to make those late August trims after failing to make them in early June, when energy was a major outperformer. It turns out our discipline helped cushion the blow. It certainly doesn't hurt that PXD has a huge annual double-digit percentage dividend yield. (Jim Cramer's Charitable Trust is long WYNN, SBUX, AAPL, HUM, AMZN, HAL, NVDA, AMD, META and PXD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, September 26, 2022.

Brendan McDermid | Reuters