Think Tesla stock's 60% year-to-date gain is impressive? Other stocks, including a few in the S&P 500, are blowing its doors off.
So far this year, seven stocks in the S&P 1500 (which includes the S&P 500), including Sotera Health, LendingTree and even meme stock Bed Bath & Beyond, jumped more than 60%, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
These massive gains show in dramatic fashion how S&P 500 investors' taste for speculation is back in a big way. Shares of the seven S&P 1500 companies outperforming Tesla this year are bouncing back from beat downs last year. These stocks, on average dropped more than 70% last year on average. And Tesla stock itself is coming back from a 65% drop last year.
Why the comeback? Investors are hoping many of the negatives pounding stocks in 2022 are disappearing in 2023. "Inflation, interest rates and earnings remain key to equity returns," said U.S. Bank Wealth Management chief equity strategist Terry Sandven. "At present, inflation remains elevated, interest rates are rising, and consensus earnings projections for 2023 — while still reflecting year-over-year growth — are trending lower."
Putting Tesla's S&P 500 Comeback Into Question
That's not to belittle the jump in Tesla's shares. The maker of electric vehicles has seen its stock jump by more than 99% of other members of the S&P 500.
Analysts are much less bullish on Tesla shares, following their run this year to 194.76. Analysts think the stock will actually be worth 1.4% less in 12 months than it is now. Much hinges on how the global economy shapes up along with Tesla's competitive position. Tesla topped analysts' December quarter profit forecasts by more than 7% when it reported on Jan. 25.
And in many ways, Tesla's hurdle for 2023 is rather low. Analysts only think the company's adjusted profit will fall more than 2% to $3.97 for the year.
But it's not hard to find stocks doing better still. Keep in mind Tesla is still trading down 50% from its 52-week high.
Beating Tesla In The S&P 500
As solid as Tesla stock is this year, it's third fiddle even among its big-cap peers in the S&P 500.
Align Technology, the seller of Invisalign teeth straightening products, is up more than 66% this year. That's an impressive rebound for the S&P 500 stock that plunged more than 67% in 2021. The run-up makes fundamental sense. Analysts think the company's profit will rise more than 3% in 2023 following a 30% drop in 2021. And more than 21% growth is forecast for 2024.
Warner Bros. Discovery also remains a surprise Tesla stock beater in the S&P 500. It's up more than 62% this year so far. Analysts are bullish on the opportunities by combining the reality shows of Discovery with Warner Bros.' storied catalog. It, too, though has some proving to do. Shares are still down 50% from their high. Analysts think the company will lose money in 2022 and 2023, until turning a profit in 2024.
Small But Mighty Stocks Top Tesla
When it comes to top stocks this year, though, smaller winners are pulling ahead.
Midsize lab testing company, Sotera Health, has seen its shares rocket more than 113% this year. That makes it the next top performer in the S&P 1500 index following the astounding 133% surge in struggling Bed Bath & Beyond. And that's after losing nearly 65% of its value in 2022. Shares are still 29% off their 52-week high. It's still a growth story, though. Analysts think its profit will rise 5.7% in 2022 and another 8.6% in 2023.
Another solid performer is small-cap financial LendingTree. Shares more than doubled in value this year to 17.80 a share. That helps ease the pain of an 83% drop in 2022. It's still 66% off its 52-week high though.
Tesla's run this year is solid, no doubt. But don't make the mistake of thinking its in the pole position in a solid year.
Better Than Tesla Stock
S&P 1500 stocks outperforming Tesla this year so far
| Company | Symbol | Index Constituents [Primary Listing] | YTD ch. | Sector |
|---|---|---|---|---|
| Bed Bath & Beyond | S&P 600 | 133.5% | Consumer Discretionary | |
| Sotera Health | S&P 400 | 113.7 | Health Care | |
| LendingTree | S&P 600 | 102.6 | Financials | |
| Scotts Miracle-Gro | S&P 400 | 66.8 | Materials | |
| LivePerson | S&P 600 | 66.0 | Information Technology | |
| Align Technology | S&P 500 | 62.4 | Health Care | |
| Warner Bros. Discovery | S&P 500 | 62.4 | Communication Services | |
| Tesla | S&P 500 | 58.1 | Consumer Discretionary |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
