If you're just looking at the big S&P 500 energy stocks to make you money this year, you're missing out on some off-the-radar stocks putting up huge gains.
If you look hard, you'll find that 10 less-known stocks in the S&P 600 SmallCap and S&P 400 Midcap indexes, like health care play Lantheus plus a slew of smaller energy firms like Consol Energy, are up 70% or more this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
And that's saying something. The S&P 500 index is down more than 14% this year so far. And even the Energy Select Sector SPDR ETF, which tracks larger energy stocks in the S&P 500, is only up 38% this year.
Smaller stocks are turning on the jets. "Small caps outperformed in July for the third consecutive month: the Russell 2000 (+10.4%) led the Russell MidCap (+9.9%) and the Russell 1000 (+9.3%), narrowing the year-to-date underperformance gap of small vs. large," said Savita Subramanian of Bank Of America.
It's Not Just Big Cap S&P 500 Energy That's Working
Big energy stocks in the S&P 500 seem to be doing well. But they're not the absolute outperformers.
The only S&P 500 stock to rise more than 70% this year is Occidental Petroleum. And it's largely benefited from Warren Buffett's aggressive buying of the stock this year. Additionally, the profit outlook for Occidental is stellar. Analysts think the company will earn an adjusted $10.58 a share this year, up more than 300% from 2021.
But smaller companies are still putting up much bigger numbers this year.
It's A Landslide: The Year's Top Stock Is Lantheus
Looking for a 163.9% gain in a down year? There's a way to pull it off, but it's not an S&P 500 energy company.
Lantheus, a maker of testing products for heart and cancer diseases, isn't a large firm. With a market value of just $5.2 billion, it squarely falls in the small-cap category in the S&P 600. But what it has now, that's more valuable than size, is growth. Analysts think the company will make $3.08 a share this year on an adjusted basis. If they're right, that would be growth of more than 500%.
Additionally, it's not just a cost-cutting play. The company's revenue is expected to hit $829 million this year, roughly double from 2021.
And that's exactly what S&P 500 investors can't easily find. Analysts think the stock will be worth 92 a share in 12 months, up another 21% from Tuesday's closing price. And that's on top of the stock's already more than doubling this year.
Smaller Energy Firms Do Best
Yes, energy stocks are rocking this year. But smaller ones are doing even better than the giants in the S&P 500.
Nine of the 10 top performing stocks this year in the S&P 600 and S&P 400 hail from the energy sector. And the numbers blow away nearly anything you'll find in the S&P 500.
Take Consol Energy, a Pennsylvania-based coal production company. Politicians might like to talk about moving away from coal, but investors can't rush into it fast enough. Just this year, shares are up more than 160% to 59.63, just behind Lantheus' stock gain. And it makes Exxon Mobil's 54% stock rise this year look less impressive.
It's not just speculation, either. Analysts peg the company to earn $7.24 a share this year on an unadjusted basis, up more than 650% from 2021. As a result, they think the company is worth 61.50 a share
All this isn't to say the S&P 500 isn't worth the trouble. It's only to point out that if you stray a little from the beaten path, even in a tough year, you can land some huge gains.
Biggest Gainers This Year In S&P 600 and S&P 400
Big isn't better this year so far
| Company | Symbol | Index | Stock YTD % ch. | Sector |
|---|---|---|---|---|
| Lantheus Holdings | S&P 600 | 163.9% | Health Care | |
| CONSOL Energy | S&P 600 | 162.6 | Energy | |
| PBF Energy | S&P 600 | 157.0 | Energy | |
| Patterson-UTI Energy | S&P 600 | 92.9 | Energy | |
| EQT | S&P 400 | 92.0 | Energy | |
| Helmerich & Payne | S&P 600 | 88.7 | Energy | |
| Talos Energy | S&P 600 | 83.5 | Energy | |
| Range Resources | S&P 400 | 77.7 | Energy | |
| Nabors Industries | S&P 600 | 71.9 | Energy | |
| RPC | S&P 600 | 70.5 | Energy |
