It was a good month to be an equity investor, as the index moved higher by 6.8% during July, 2010. Some investors did much better than that with the best performing S&P 500 stocks spread across different sectors and powered higher for a variety of reasons ranging from merger speculation to positive earnings surprises.
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The Big Winner
Genzyme (Nasdaq:GENZ) was the best-performing stock in the S&P 500 in July 2010, as the market bid the stock up 37% due to speculation that Sanofi Aventis, the French pharmaceutical company would make an offer for the company. Investors should expect this one to drop quickly if no offer materializes.
The Comeback Kid
Anadarko Petroleum (NYSE:APC) bounced back strongly from its recent lows as the market has trashed the stock all summer due the company's non-operating interest in the Gulf of Mexico well that blew out back in April 2010.
Although Anadarko Petroleum's interest in the well was only 25%, the market sold the stock off down to a low of $35, clipping 50% off the value. Now that BP (NYSE:BP) has apparently sealed the leak, the market paranoia over potential liability has dissipated, and the stock rebounded up by 36% in July.
Citrix Systems (Nasdaq:CTXS) also had a great July, and moved 30% higher during the month, with most of the increase coming in the last few days of July. Citrix Systems beat guidance when it reported second fiscal quarter earnings, and also raised its outlook for the third quarter and full year.
During the conference call, management was cautious on the Europe outlook, but said it was "encouraged by the improving business dynamics seen in most geographies." Investors responded by pushing the shares higher as Citrix Systems saw at least four analyst upgrades in the aftermath of the earning release. (Learn more about conference calls, see Conference Call Basics.)
Interpublic Group (NYSE:IPG) also beat estimates when the company reported its second quarter earnings. Although the company had some easy comparisons due to the plunge in business in 2009, management was encouraged by the broad based rebound in business it saw during the quarter.
Slow and Steady
CF Industries Holdings (NYSE:CF) crawled slowly higher all month and ended July up 27.96%, as the company benefited from positive investor sentiment on the fertilizer industry in general. CF Industries Holdings reports earnings the first week in August, and investors must wait until then to see if the fundamentals match the recent enthusiasm that the market has shown for fertilizer stocks.
The Bottom Line
The best performing stocks in July 2010 were from a broad range of sectors and did better than the market due to better than expected earnings, buyout rumors and changing investor sentiment.
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