The S&P 500 is already up 11.4% so far this year — more than what it usually returns in a full year. And about half of that gain, 5.3%, happened just in April. Even bigger money-making opportunities pop up in the index, too.
Six stocks in the world’s most popular index, including credit reporting agency Equifax (EFX), communication services company Dish Network (DISH) and consumer discretionary Pool (POOL), jumped more than 20% in April alone, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
S&P 500’s Huge Returns
Stocks are minting massive wealth. All told, had you invested $10,000 in January and reinvested your money into the top stocks currently in the S&P 500 each month this year, including in April, you’d have $35,864 now. That’s a remarkable four-month gain of 259%. That even beats the impressive rise in the S&P 500 this year so far, which turned a $10,000 investment into $11,140.
Hindsight is 20/20. And clearly, few if any investors could have pulled this off as it’s not a repeatable strategy. But the staggering numbers are a reminder to investors that gains can be enormous even more than a year into a bull market with continued market leadership.
Strong S&P 500 profits underpin strength in the economy and market, says Sophie Griffiths, market analyst at Oanda. “While earnings will still be coming in thick and fast, a deluge of U.S. macro data will also help guide investors on the health of the U.S. economy,” she said.
April Lives Up To Rep As “Best Month”
April is usually the S&P 500’s top month. And it lived up to its good reputation yet again. That’s due to some high-quality stocks.
The S&P 500’s gain in April this year outstrips the 4.2% gain in March, 2.6% rise in February and 1.1% decline in January. It’s no surprise to market historians. The S&P 500 jumped 1.6% in April on average, more than any other month, going back to 1950, says the “Stock Trader’s Almanac.” And the month can really be a real money maker. The best April in history, in 2020, took the S&P 500 up 12.7%.
Real estate was a big sector winner in April 2021. The Real Estate Select Sector SPDR ETF (XLRE) jumped 8.3%, just in April. That made it tops among the 11 S&P 500 sectors during the month. Communications services and consumer discretionary stocks, though, are also strong. These sectors ended the month in a three-way tie for the No. 2 top performance, rising 6.5%.
It’s a quality stock rally. And the top S&P 500 stocks of April 2021 highlight this. All six of April’s top S&P 500 stocks sport IBD Composite Ratings of 86 or higher. This means their charts and fundamentals outstrip 86% of all other companies’. Dish Network jumped 23.7% while Pool gained 22.4%. Dish has a Composite Rating of 92 and Pool a perfect 99.
What’s the top stock in April? Equifax, which helps companies verify the creditworthiness of customers, saw its shares jump 26.6% in April. A strong first-quarter report helped the stock. The company on April 21 reported 40% higher quarterly profit, smashing expectations by more than 25%.
Top S&P 500 Stocks In April 2021
|Company||Symbol||April % Gain||Sector||Composite Rating|
|DISH Network||(DISH)||23.7%||Communication Services||92|
|Seagate Technology||(STX)||21.0%||Information Technology||89|
Source: IBD, S&P Global Market Intelligence
What’s Next Following An Amazing April?
The Equifax gain in April is only the icing on the cake for a month of incredible winners. In fact, Equifax’s April gain is actually tame compared to some big individual stock gains earlier in the year.
The massive Reddit-fueled “short-squeeze” took Discovery (DISCA) up 37.7% in January. That was impressive as the S&P 500 sank 1.1% that month. And then in February, value-priced and energy S&P 500 stocks soared. Marathon Oil (MRO) jumped 53.3% in February. And then, the materials boom followed with a 34.2% jump in steelmaker Nucor‘s (NUE) shares.
Don’t expect May to be as bullish as April. May and June are known for being somewhat difficult months for the S&P 500, says Stock Trader’s Almanac. Historically, May ranks as only the eighth best month of the year, eking out just a 0.2% gain on average since 1950.
But following such a powerful April for the S&P 500, you’re not likely to hear many complaints.
Top Current S&P 500 Stocks Each Month In 2021
Being in the right stock each month turned $10,000 into $35,864
|Month||Top S&P 500 Stock||Symbol||Stock Monthly % Gain||Sector||S&P 500 % Monthly Ch.||Beg. Bal.||Cumulative Value Of $10,000 Investment In January Reinvested In Top Stock Each Month||Composite Rating|
|January||Discovery, Inc.||(DISCA)||37.7%||Communication Services||-1.1%||$10,000||$13,770||63|
|February||Marathon Oil Corporation||(MRO)||53.3%||Energy||2.6%||$13,770||$21,109||47|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz