The S&P 500 is already up more than 4% in 2012, and the average stock in the index is up 4.98%. We ran our decile analysis on the index to see which stock characteristics, if any, are driving performance so far this year.
One of the characteristics we looked at is simply how the stock performed in 2011. After breaking the index into deciles (10 groups of 50 stocks each) based on 2011 stock performance from best to worst, we then calculated the average performance of the stocks in each decile so far in 2012. As shown below, the 50 S&P 500 stocks that did the best in 2011 are up an average of 2.1% so far this year. The next best group of 50 stocks in 2011 are up an average of just 1.1% in 2012.
On the other hand, the 50 stocks that did the worst in 2011 are up an average of 11.2% in 2012. Clearly traders have been doing some serious dumpster diving to start the year, while leaving behind 2011's winners!
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