Some Stars Among The Dark Clouds

Published on Thursday, 31 May 2012 21:59 Written by Todd Shriber

May 2012 will go down, as the worst month for U.S. stocks in two years and the monthly performance for the S&P 500 was the worst since September 2011. With a loss of more than 6%, parsing through the broader market index for May winners isn’t that had because, simply put, there aren’t that many. According to Finviz data, only 65 of the index’s 500 constituents closed higher for the month.

Those looking for big winners or stocks up by at least 10% will find the pickings even slimmer. Only five, or 1%, of S&P 500 constituents generated double-digit returns in the month of the May, indicating that once again "Sell in May and go away" works.

With that and knowing that some June gloom could be right around the corner, let’s have a look at some of May’s best performers.

Wal-Mart (NYSE: WMT):

The world’s largest retailer jumped 11.4% in May as investors ran away from riskier sectors into comforting arms of consumer staples. Wal-Mart’s May performance is all the more impressive when considering the Dow Jones Industrial Average, of which Wal-Mart is a member, was also down more than 6% during the month. Wal-Mart’s May 2012 performance was the stock’s best one-month run in a decade and with the market environment setting up to be even more favorable to staples stocks, Wal-Mart could be poised for more upside.

Expedia (NASDAQ: EXPE):

Kudos to Expedia, the stock that is viewed as a consumer discretionary/Internet play for gaining more than 10% in May. Even more impressive is the fact that rival Trip Advisor (NASDAQ: TRIP) surged more than 17%. What really makes those two gains all the more spectacular is the fact that Priceline (NASDAQ: PCLN), the true momentum play of the online travel stocks, was clipped to the tune of more than 17% last month.

Cooper Industries (NYSE: CBE):

OK, so maybe we’re cheating a bit by including Cooper Industries on this list, but the stock was up almost 13% last month. We might be cheating because essentially all of that is attributable to news that Eaton Corp. (NYSE: ETN) will pay $11.8 billion to acquire Cooper.

Dean Foods (NYSE: DF):

While Dean Foods doesn’t pay a dividend, something investors usually look for with food stocks, the stock is doing something most other S&P 500 constituents are not: Delivering capital appreciation. In May, Dean Foods jumped 27% on the back of a strong earnings report delivered earlier in the month. Like Wal-Mart, Dean Foods has benefited from a market-wide shift to staples stocks. While the S&P 500 closed down on the last day of May, Dean Foods touched a new 52-week high.