Amid the coronavirus crisis, the S&P 500 Index recorded its worst quarterly performance, having shed 20% in the first quarter. The proxy version of the Index, SPDR S&P 500 ETF Trust SPY tumbled 19.4% in the said timeframe.
This is especially true given that the pandemic has resulted in lockdown and forced people to stay home, leading to halt in business and economic activities. The slew of fiscal and monetary stimulus measures failed to revive investors’ confidence in the economy and the stock market. Though all 11 sectors in the index were down in the quarter, information technology and healthcare fared better than others.
As most people are at home, demand for remote work, entertainment and e-commerce have risen, pushing many technology stocks higher, especially cloud computing and streaming providers as well as gaming servers. Meanwhile, most healthcare companies also gained due to testing treatments for the novel coronavirus (read: Healthcare ETFs Gain on Rising Demand for COVID-19 Tests).
Let’s take a closer look at the fundamentals of SPY and its best stocks:
Inside the SPY
The ETF holds 505 stocks in its basket with each accounting for not more than 5.61%. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, financials and communication services being the top four, with double-digit allocation each. It has AUM of $239.7 billion and charges 9 bps in fees per year from investors. The product trades in heavy volume of around 104.6 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors (see: all the large Cap Blend ETFs here).
SPY has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. Though most stocks in the fund’s portfolio are in red from the year-to-date look, there are a few that held their ground in the ongoing market turmoil. Below, we have highlighted five of them that are in green in the first quarter and have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold):
Best-Performing Stocks of SPY
Regeneron Pharmaceuticals Inc. REGN: The biopharmaceutical company is focused on the discovery, development and commercialization of treatments targeting serious medical conditions. It has gained 30% in the first quarter and saw positive earnings estimate revision of 7 cents for this year in the past month. The company has an estimated earnings growth rate of 16.2%. The stock has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Citrix Systems Inc. CTXS: It is a leading provider of virtualization, networking and cloud computing solutions to more than 400,000 organizations worldwide. The stock climbed 27.6% in the same time frame and saw negative earnings estimate revision of 9 cents in a month for this year. Citrix Systems has a Zacks Rank #2.
Netflix Inc. NFLX: This Zacks #2 Ranked company is a provider of Internet television (streaming services) and DVD-rental services. It has gained 7.8% in the first quarter and saw positive earnings estimate revision of a penny for this year in the past month. The company has an estimated earnings growth rate of 47% (read: Is It the Right time to Buy Netflix ETFs?).
Digital Realty Trust Inc. DLR: This company is engaged in the ownership, acquisition, repositioning and management of technology-related real estate. Having a Zacks Rank #3, the stock has risen 16% in the first quarter. Its earnings are expected to decline 2.3% for this year.
The Clorox Company CLX: It is engaged in the production, marketing and sale of consumer products in the United Sates and international markets. The stock climbed 12.8% in the same time frame and saw positive earnings estimate revision of 23 cents in a month for the fiscal year ending June 2020. It has an estimated earnings growth rate of 1.58%. Clorox has a Zacks Rank #1 (read: Top ETF Stories of First Quarter).
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Click to get this free report Citrix Systems, Inc. (CTXS) : Free Stock Analysis Report Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Clorox Company (CLX) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report