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April's Top 5 S&P Stocks
The stock market performed well in April, creating opportunity for many stocks to make up some of their previous losses. As a result, the best performing stocks in the S&P 500 in April 2011 were spread across various areas of the market including technology, retail and biotechnology. These companies ended up on the list for some very different reasons, including buyout offers, product successes and positive news on earnings. Here we take a look at which stocks rose to the top of the index - and why.
TUTORIAL: Exchange-Traded Funds
National Semiconductor (NYSE:NSM) was the best-performing stock in the S&P 500 in April 2011, finishing up 66% for the month. The company was on the receiving end of a $6.5 billion buyout offer from rival Texas Instruments (NYSE:TXN). The $25 all-cash offer was at a stunning 65% premium to the closing price of National Semiconductor. This premium seems designed to discourage any rival bids from other possible suitors. The combined companies will have 17% of the analog semiconductor market with approximate revenues of $7.2 billion as well as 42,000 products to offer customers.
Biogen Idec (Nasdaq:BIIB) released positive news on BG-12, a drug undergoing clinical testing to treat multiple sclerosis. The company said that testing indicated that the drug reduced the relapse rate and delayed the progression of the disease. This was the second bit of positive news on BG-12 in April, and investor enthusiasm on the prospect of this drug moved the stock up 36% for the month.
Biogen Idec also reported an upside earning surprise when the company reported its results for the first quarter of 2011. The company had $1.43 per share in profit, 2 cents per share better than analysts' estimates.
Supervalu (NYSE:SVU) also moved higher on positive earnings news. The company reported earnings of 44 cents per share for the fourth quarter of fiscal 2011, beating consensus estimates of 33 cents per share. Supervalu also raised its earnings outlook for fiscal 2012 to a range of $1.20 to $1.40 per share, above the consensus of $1.15 per share that analysts were expecting. In April 2011, Supervalu returned 26% for investors that were long this stock.
Two retailers also made the list of best performing stocks in the S & P 500 in April 2011. Limited (NYSE:LTD) finished up 24% and Abercrombie & Fitch (NYSE:ANF) moved up 22% for the month.
Abercrombie & Fitch held an analyst day in early April and issued earnings guidance of $4.75 per share for fiscal 2012, far above the $3.97 per share consensus for that year. The company also set an ambitious sales goal of $7.5 billion by fiscal 2015. Abercrombie & Fitch hopes to achieve this growth through the opening of International Flagship Stores and Hollister Europe, along with higher direct-to-consumer sales.
Limited benefited in April 2011 from general investor enthusiasm for retail stocks as March retail sales came in above what most were expecting. The company also had one of the strongest March sales reports with comparable store sales up 14%. Limited was also mentioned as a possible acquisition candidate by private equity firms.
The Bottom Line
The equity market performed well in April 2011, with the five best performing stocks in the S&P 500 spread across different sectors and up due to positive earnings surprises, buyout offers or positive news on new products. (For related reading, also take a look at Analyzing Retail Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
TUTORIAL: Exchange-Traded Funds
National Semiconductor (NYSE:NSM) was the best-performing stock in the S&P 500 in April 2011, finishing up 66% for the month. The company was on the receiving end of a $6.5 billion buyout offer from rival Texas Instruments (NYSE:TXN). The $25 all-cash offer was at a stunning 65% premium to the closing price of National Semiconductor. This premium seems designed to discourage any rival bids from other possible suitors. The combined companies will have 17% of the analog semiconductor market with approximate revenues of $7.2 billion as well as 42,000 products to offer customers.
Biogen Idec (Nasdaq:BIIB) released positive news on BG-12, a drug undergoing clinical testing to treat multiple sclerosis. The company said that testing indicated that the drug reduced the relapse rate and delayed the progression of the disease. This was the second bit of positive news on BG-12 in April, and investor enthusiasm on the prospect of this drug moved the stock up 36% for the month.
Biogen Idec also reported an upside earning surprise when the company reported its results for the first quarter of 2011. The company had $1.43 per share in profit, 2 cents per share better than analysts' estimates.
Two retailers also made the list of best performing stocks in the S & P 500 in April 2011. Limited (NYSE:LTD) finished up 24% and Abercrombie & Fitch (NYSE:ANF) moved up 22% for the month.
Abercrombie & Fitch held an analyst day in early April and issued earnings guidance of $4.75 per share for fiscal 2012, far above the $3.97 per share consensus for that year. The company also set an ambitious sales goal of $7.5 billion by fiscal 2015. Abercrombie & Fitch hopes to achieve this growth through the opening of International Flagship Stores and Hollister Europe, along with higher direct-to-consumer sales.
Limited benefited in April 2011 from general investor enthusiasm for retail stocks as March retail sales came in above what most were expecting. The company also had one of the strongest March sales reports with comparable store sales up 14%. Limited was also mentioned as a possible acquisition candidate by private equity firms.
The Bottom Line
The equity market performed well in April 2011, with the five best performing stocks in the S&P 500 spread across different sectors and up due to positive earnings surprises, buyout offers or positive news on new products. (For related reading, also take a look at Analyzing Retail Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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