A long bull market quickly turned ugly this fall, wiping out several of 2018’s best performers. The S&P 500 index finished the week before Thanksgiving off almost 7% from its record high, set on Sept. 20, slashing its year-to-date gain to barely more than 2%. The pain has been widespread over the past two months, with the majority of S&P 500 companies in negative territory since the peak.
But there are a few stocks investors can still be thankful for as Thanksgiving approaches this week. The best-performing stock while the rest of the market crashed and burned? TripAdvisor (TRIP), up 26% since Sept. 20, largely thanks to earnings. The travel booking and review website popped over 15% in a single day after reporting way-better-than-expected third quarter earnings on Nov. 8.
Only two of the S&P 500 sectors have risen since Sept. 20: consumer staples and utilities. Companies in those industries are considered “defensive” stocks, as their earnings tend to be stable regardless of what the economy or the rest of the stock market does. After all, people still need to buy toothpaste and use electricity, even during a recession.
Several defensive stocks cracked the top 10 performers during the market’s fall slide, namely Scana (SCG) (+24%), Walgreens Boots Alliance (WBA) (+16%), and Hormel Foods Corp (HRL) (+16%). McDonald’s stock (MCD) has climbed 17%, also boosted by a strong third quarter earnings report. Fast food chains tend to perform better in economic downturns than more expensive restaurants, as consumers cutting back on spending do a larger share of their eating out there. That gives fast-food companies similar defensive status to the consumer-staples and utility companies above.
Expectations of a cold winter have boosted natural gas prices in recent weeks, fueling Cabot Oil & Gas stock (COG) 17% higher as much of the market shivered.
IBM (IBM) made a splash on Oct. 28, offering a 63% premium to acquire software provider Red Hat (RHT). That sent Red Hat stock up 45%, erasing several prior weeks of declines. Since Sept. 20, Red Hat is up over 21%.
L Brands (LB), the parent company of several brands including Bath & Body Works, La Senza, and Victoria’s Secret, caught a recent break from a rough 2018. While the S&P 500 had climbed almost 10% through Sept. 20, L Brands saw its stock price halved as its brands struggled to keep up with consumers’ changing tastes. Down almost 75% since its early-2016 peak, the stock rebounded from its oversold and battered dregs in recent weeks, rising 19% since Sept. 20.
Rounding out the top 10 standouts are Starbucks (SBUX) (+24%) and Under Armour (UA) (+17%). Both companies knocked it out of the park with blockbuster earnings reports in the past few weeks.