It’s been a tricky month for the market amid fears around bloated artificial-intelligence valuations.
After a hefty selloff, the S&P 500 is on pace for its best Thanksgiving week since 2012, with growing confidence the Federal Reserve will cut interest rates at its Dec. 9-10 policy meeting. The benchmark index suffered a 5% drawdown between Oct. 28 and Nov. 20, but has risen 4% since then to pare back nearly all of its losses.
Still, the AI fears haven’t fully gone away, with Wall Street still trying to figure out whether Nvidia or Google parent Alphabet will win the battle for chip supremacy. Investors will be weighing up how to shield their portfolios in case the rebound loses steam.
Barron’s identified the stocks that didn’t fall over the course of the selloff between Oct. 28 and Nov. 20, and then have risen by 5% or more since then. We excluded any names that are trading for less than 20-times future earnings, which bumped Alphabet off the list.
Western Digital is the star name. Shares in the data storage company jumped 12% during the AI selloff, and another 13% since the S&P 500 bottomed out. Western Digital reported strong earnings for its fiscal first quarter on Oct. 31 and has carried on rising since then, with investors betting that the AI boom will drive up demand. At 13.1-times current earnings,the stock looks good value.
Gold miner Newmont is another stock that fits the bill, cracking the list thanks to a 5.2% surge on Wednesday.Gold prices slumpedin mid-October but have been climbing steadily since then, which ought to boost Newmont’s bottom line. Shares fetch 13-times current earnings.
Merck also managed to dodge the worst of the selloff, then rise during the rebound. Merck, which trades at 14.8-times earnings, agreed earlier this month tobuy a biotechthat makes a new flu prevention drug, extending a dealmaking spree among pharma companies.
Healthcare company Centene, diesel engine designer Cummins, solar panel manufacturer First Solar, and hospital and healthcare provider Universal Health Services are the other stocks that eked out gains during the market slump, have risen 5% or more since then and trade at less than 20-times earnings.