SVU

A list of the 25 top performing stocks of 2010 (ex. Financials) from within the S&P 500 index. We have taken the top 25 companies from 2010 and provided our readers 3 attractive and 5 unattractive stocks from this list based on their valuation attractiveness relative to sector peers and overall investment opportunity using key criteria that The Applied Finance Group (AFG) uses in its stock selection process including corporate performance, management quality and earnings quality to see which of the top performers still look to have upside and which look like they have run out of room to run.

Below is Value Expectations’ analysis of the companies in the S&P 500 with the 10 best and 10 worst returns for 2009 YTD (excluding financial companies). Comparing the sales growth expectations priced in (VE sales growth) to what the company has delivered in sales growth historically allows us to see which firms have the most reasonable sales growth expectations implied by their current trading prices and thus are more likely to outperform. Will the companies with the best returns be able to maintain their momentum for the remainder of 2009? Will the companies with the worst returns be able to turn things around? We will track the S&P500 winners and losers in the year ahead and provide you with regular updates.

10 Worst S&P 500 Companies 2009 YTD

 

10 Best S&P 500 Companies 2009 YTD

*data as of close Feb. 20, 2009

 

*AFG’s Value Expectation allows us to understand the imbedded Sales Growth, EBITDA Margins, and Asset Turnovers a company has to deliver in the future to justify its current trading price. In theory and in normal circumstances, if the imbedded future performance is very conservative relative to the company’s historical performance, the stock is regarded as undervalued. The table displays the implied future sales growth of companies assuming their EBITDA margins and Asset turnovers stay at the 5 year median levels.

Here are the best and worst performing stocks in the S&P 500 for the month of January excluding financials. Compare the implied sales growth priced-in to justify the current trading price (VE Sales Growth) vs. what the company has delivered in sales growth the past 5 years (5 Year Median Sales Growth) to see if the expectations are realistic for the company to achieve. The more realistic the expectations are compared to what has been delivered the more likely the firm will be to out-perform.

 

Top 10 stocks in January (excluding financials) and Sales Growth Expectations

 

Worst 10 stocks in January (excluding financials) and Sales Growth Expectations

With just a few trading days under our belt in 2009, these stocks have made the biggest moves so far according to Bespoke.com. Will these stocks continue the January hot/cold streak into the rest of the year or is this just a fluke. Only time will tell. We measured the implied sales growth priced-in to justify their current price (VE Sales Growth) against what these firms have delivered in sales growth for the past 5 years to see which companies have low or reasonable expectations. Companies with low expectations for sales growth priced-in relative to what they have been able to deliver are the ones that are more likely to out-perform.

 

 

 

VE Sales Growth calculated on 1-13-09

These lists exclude financials.