Top Sectors of July & Their Top Stocks
As expected, July was congested with trade war talks. While the U.S.-Sino trade relation showed hardly any sign of improvement, vibes between the United States and European Union vibes turned positive.
In any case, July is historically a subtle month. A consensus carried out from 1950 to 2017 shows that July ended up offering positive stock returns in 38 years and negative returns in 30 years, per moneychimp.com, with an average return of 0.89%.
Against this historical market performance, let’s take a look at the sectors and their top-performing stocks that won this month.
Biotech
The sector has been enjoying a host of tailwinds lately. President Trump’s announcement of the drug plans in May, which were in the best interest of pharma companies, continue to favor the space. Also, positive drug trial results from the likes Biogen (BIIB) helped the sector as a whole.
CorMedix Inc CRMD – Up 139.32%
It is a development-stage pharmaceutical company that seeks to in-license, develop and commercialize therapeutic products for the treatment of cardiac and renal dysfunction. The stock has a Zacks Rank #3 (Hold).
Airlines
The sector probably got a boost from the upbeat projections of Fourth of July travel. AAA estimated that a record 46.9 million Americans would travel 50 miles or more during the holiday weekend (Jul 3-8), up 5% from last year. Of them, 3.8 million would fly.
Moreover, the International Air Transport Association projected global air passenger numbers to grow to 4.3 billion in 2018 and traffic to pick up 6.0%, though down from 7.5% growth of 2017 but ahead of the 5.5% average for the past 10-20 years.
Traffic, in fact, will likely beat the capacity expansion of 5.7%. The number would boost the average load factor to a record 81.4%, leading to a 3% improvement in yields.
IATA went on to forecast that revenues from the passenger business are expected to grow 9.2% year over year to $581 billion. It also predicted a 4.5% year-over-year increase in cargo to 62.5 million tons. E-commerce boom is expected to drive the cargo business.
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. VLRS – Up 44.96%
The company provides aircraft transportation services and offers general cargo shipment. Controladora Vuela Compania de Aviacion, S.A.B. de C.V. is based in Santa Fe, Mexico. The stock has a Zacks Rank #3.
Energy
Rising global demand, reports of supply disruption, Venezuelan crisis, other geopolitical tensions and a decline in inventory have sent oil prices on an upward trajectory. In June, OPEC members cut a deal to boost output by a lower-than-expected margin. Also, the sentiments were upbeat in the energy space due to strong Q2 earnings expectations. This is especially true as total earnings for the sector are expected to be up 138.9% from the same period last year on 18.8% higher revenues, per Earnings Trends issued on Jul 25, 2018.
World Fuel Services Corporation (INT) – Up 34.04%
The Zacks Rank #3 company is into global energy management. The stock belongs to a top-ranked Zacks industry (top 7%) and sector (top 13%).
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