It's been a rough year for all investors — with the S&P 500 down more than 20%. But young Generation Z investors still found spots to make money.
These investors, aged anywhere from 10 to 26 years old, held big positions in 11 stocks up this year by 10% or more, including mostly energy firms like Occidental Petroleum and Exxon Mobil, but also financials like Wells Fargo. This is based on an Investor's Business Daily analysis of data from Apex, summarizing positions in 1.4 million Generation Z accounts as of Sept. 30, and S&P Global Market Intelligence.
Such winning stocks stand out for a generation of investors pulled into stocks during a boom only to go bust this year. But now many investors are wondering if the Federal Reserve's efforts to slow the economy are largely played out.
"Wall Street smashed the buy button after reports that the Fed would soon be ready to debate on how to slow the pace of tightening after the November (Fed) meeting," said Edward Moya of Oanda.
Gen Z Finding Spots Of Profit In S&P 500
This new generation of investors is suffering alongside millennials, Gen X and baby boomers. But it at least has a few winners, too.
Only 18 of Gen Z's top 100 most popular stocks are up this year. But what matters most is they're hitting some big wins. Their 18 stocks that are up this year have gained an average 35%. And that's due to the 11 holdings up 10% or more this year.
Ironically, the generation is getting bailed out this year by its positions in energy stocks. That's a bit surprising as this is supposedly the generation of clean energy. And yet, nearly half of the top Generation Z holdings are in the energy sector.
Big Energy Sector In S&P 500 Wins For Gen Z
Gen Z's top stock this year by a long shot is Occidental Petroleum. Shares of the oil exploration company, a favorite of Warren Buffett, are up 146% this year.
The company's profit growth is taking off due to stratospheric oil prices. Analysts think the company will earn $10.35 a share this year, up more than 300% from 2021. And the company is expected to report third-quarter profit on Nov. 8. Analysts think the company will make $2.48 a share in the quarter, up more than 185% from the same year-ago period.
But Occidental isn't Gen Z's only big energy win in the S&P 500. They've also struck it rich with a nearly 73% gain in Exxon Mobil. And it's a similar story with this energy giant. Analysts think higher oil prices will lift the company's profit by 142% this year.
It's Not Just Energy Lifting Gen Z
It would be an oversimplification, though, to say Gen Z's only winners are in the energy sector.
Increasingly, financials are giving energy stocks a run for their money. That's the case with Wells Fargo, which is the 84th most popular position in Gen Z portfolios. Shares of the bank amid a turnaround are up an impressive 59%. And on top of that solid gain this year, the bank yields 2.7%.
It's important to note that Gen Z is taking its fair share of lumps. Occidental ranks only as their 98th most popular stock. Exxon is No. 26 and Wells Fargo is 84. Many of the generation's very top holdings, like No. 1 Tesla, are down this year.
But at least these new investors are finding some winners in a tough S&P 500.
Gen Z's Top Stocks This Year
| Rank Sept. 30, 2022 | Company | Symbol | YTD % ch. | Sector |
|---|---|---|---|---|
| 98 | Occidental Petroleum | 145.6% | Energy | |
| 97 | Antero Resources | 91.0 | Energy | |
| 26 | Exxon Mobil | 72.8 | Energy | |
| 84 | Wells Fargo | 48.4 | Financials | |
| 58 | Chevron | 47.3 | Energy | |
| 68 | Energy Transfer | 46.7 | Energy | |
| 96 | Societe BIC | 43.3 | Industrials | |
| 46 | Enphase Energy | 37.8 | Information Technology | |
| 82 | Lockheed Martin | 27.8 | Industrials | |
| 94 | Simon Property Group | 18.3 | Real Estate | |
| 56 | 15.6 | Communication Services |
Sources: Apex, IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
