With the first half of 2023 now in the rearview mirror, investors have the opportunity to look back and see which stocks have outperformed the S&P 500 Index since the start of the year. Year-to-date, the market index is higher by more than 16%. The three top performing sectors so far this year are industrials, technology and consumer cyclical.
Thus, using the GuruFocus All-in-One Screener, a Premium feature, I searched for stocks in each of these sectors that are valued at more than $2 billion, have produced at least a 20% better return relative to the S&P 500 year-to-date and which have high GF Scores of at least 90 out of 100. According to a historical study by GuruFocus, stocks with higher GF Scores tend to outperform those with lower GF Scores on average.
This article will examine one name from each of the top performing sectors in the first half of the year that meet these criteria: FedEx Corp. (FDX, Financial), NetApp Inc. (NTAP, Financial), and Wingstop Inc. (WING, Financial).
FedEx Corp
First up is FedEx Corp. (FDX, Financial), one of the largest transportation and shipping companies in the world. The company is valued at $62 billion and has gained more than 43% since the start of the year. This gain has occurred despite mixed results in the most recent quarterly report.
FedEx reported fiscal fourth-quarter results on June 20, with revenue declining 10% year-over-year to just under $22 billion due to lower global volumes. This was $734 million lower than analysts had anticipated. Earnings per share fell more than 28% to $4.94, but this beat the market’s expectation by 7 cents.
FedEx receives a GF Score of 90 out of 100, implying the potential for outsized returns moving forward.
Shares of FedEx currently trade close to the GF Value. With a share price of $247.55 as of this writing, FedEx earns a rating of fairly valued from GuruFocus. Shares have a forward dividend yield just over 2% presently. The company also raised its dividend nearly 10% on April 5.
NetApp Inc.
The second name for consideration is data-centric software company NetApp Inc (NTAP, Financial), which currently holds a market capitalization of just over $16 billion. Shares have returned 31% so far in 2023. Nearly 9% of this return occurred following the most recent quarterly report.
In the fourth quarter of fiscal year 2023, NetApp generated revenue of $1.58 billion, which was down 6% from the prior year, but was $39 million ahead of expectations. Adjusted earnings per share of $1.54 compared favorably to $1.42 in the prior year and was 20 cents better than analysts’ estimates. For the fiscal year, adjusted earnings per share improved 6% to $5.59.
NetApp has a GF Score of 90 out of 100, which is led by a perfect score on momentum and near-perfect scores for profitability and growth. On the other hand, scores for value and financial strength are just average.
Despite the gain in the stock, shares are just about the GF Value. NetApp's stock has a price of $76.56 as of this writing, which is just above its GF Value of $75.76. This results in a price-to-GF-Value of 1.01 and a rating of fairly valued. The stock does have a forward dividend yield of 2.6% today, which is more than a full percentage point ahead of the average yield for the S&P 500 Index.
Wingstop Inc.
The final stock I want to cover, Wingstop Inc. (WING, Financial), comes from the consumer cyclical sector. The stock has gained 21% year-to-date and is valued at $5.7 billion. Wingstop reported first-quarter results on May 3 that were well above what the analyst community had been anticipating.
Revenue surged 43% to $109 million, which was $9.2 million more than expected. Adjusted earnings per share of 59 cents surpassed estimates by 14 cents.
Wingstop has an impressive GF Score of 94 out of 100. The company has a perfect score for profitability and momentum, while value, financial strength and momentum are middle-of-the-pack.
Even with the year-to-date gains in the stock, Wingstop is trading be low its fair value according to the GF Value chart. Shares closed the most recent trading session at $189.47 as of this writing. With a GF Value of $218.77, Wingstop has a price-to-GF-Value ratio of 0.87. This earns the stock a rating of modestly undervalued. Wingstop pays a small dividend, which equates to a forward dividend yield of just 0.4%. The company did raise its dividend 11.7% last July. Shareholders have also received several special dividends on occasion, the most recent of which totaled $4.00 and was distributed on April 7, 2022.
