Who’s Leading and Lagging So Far in 2017

The first month of 2017 is officially in the books! If one thing stands out, it’s that this January looked a heck of a lot different from last January.

Stocks fell out of bed in the first month of 2016, with the Dow Jones Industrial Average suffering its worst start to any year in more than a century. But in the first month of 2017, the Dow broke above 20,000 for the first time ever — and the other major averages touched fresh all-time highs.

But if you pull back the curtain, which stocks do you find leading the way? And on the flip side, which stocks are lagging so far in 2017?

I created two Stock Screeners using our Weiss Ratings online tools to show you: An “Early Winners of 2017” Screener and an “Early Losers of 2017” Screener. I limited my analysis to U.S.-based companies with a closing price of at least $5 and a market capitalization of at least $500 million.

For the “Winners” list, I made sure to include only BUY-rated stocks (those with a “B-” or higher Rating). For the “Losers” list, I included only SELL-rated stocks (those with a “D+” or lower Rating). Then I sorted both lists by year-to-date total returns through the end of January.

Here is the list of the best-performing, highly rated winners:

Data as of February 01, 2017

And here is the list of the worst-performing, low-rated losers:

Data as of February 01, 2017

The biggest winner is a veterinary hospital company called VCA Inc. (WOOF, Rated “B”). It surged early on after the candy and food giant Mars Inc. agreed to buy the company for $7.7 billion, closing out January with a gain of around 29%.

The majority of the other winners are in the diversified technology, networking, or semiconductor industries. II-VI Inc. (IIVI, Rated “B”) is a photonics and optical components company that surged on news of strong orders tied to expanding data and communications networks. Chipmakers Skyworks Solutions (SWKS, Rated “B”) and Maxim Integrated Products (MXIM, Rated “B”) jumped after releasing strong quarterly earnings and bullish outlooks.

Meanwhile, Opus Bank (OPB, Rated “D+”) led the losers list, with a year-to-date loss of almost 32%. The Irvine, California-based bank stock bucked the broader uptrend in financials because it reported a large jump in nonperforming loans and loss provisions.

Fitness gadget maker Fitbit Inc. (FIT, Rated “D”) also plummeted after it reported disappointing results, as did athletic gear and clothing company Under Armour Inc. (UA, Rated “D”). Long-struggling retailers like Sears Holding Corp. (SHLD, Rated “E+”), J.C. Penney Co. (JCP, Rated “D+”), and GNC Holdings (GNC, Rated “D”) rounded out the losers list.

The broader takeaway for investors like you is that tech is off to a great start in 2017, while retail is not. You can even see that divergence reflected in broad-based sector ETFs. The Technology Select Sector SPDR Fund (XLK, Rated “B”) was recently showing year-to-date gains of more than 4%, while the SPDR S&P Retail ETF (XRT, Rated “C”) was down by around 2%.

So you may want to stick with the winning stocks and sectors my Screeners identified … and dump or avoid the losers.

Until next time,

Mike