The beginning of the year is an ideal time to look back and review the events of the past year, but it’s also the perfect time to look ahead and make plans for successful investing for the coming year.
Goldman Sachs Portfolio Strategy Research 4Q US Quarterly Chartbook highlights that the S&P 500 index charged up another 14% last year, with more than 5% of the rise in the fourth quarter. Goldman Sachs analysts David J. Kostin and team also point out that health care and utility were the top sectors in 2014.
S&P 500: Year in review plus top sectors in 2014
Corsair Capital was down by about 3.5% net for the third quarter, bringing its year-to-date return to 13.3% net. Corsair Select lost 9.1% net, bringing its year-to-date performance to 15.3% net. The HFRI – EHI was down 0.5% for the third quarter but is up 11.5% year to date, while the S&P 500 returned 0.6% Read More
The GS report notes that the S&P 500 offered a return of 14% in 2014, including a solid 5% fourth quarter performance. Utilities and Health Care were the top sectors in 2014. The drop off in oil price in the second-half of the year caused energy stocks to be among the worst performers last year, off by more than 20 percentage points for the full year.
Among the best-performing stocks in the S&P 500 in 2014 were Southwest Airlines at +126%, Electronic Arts at +105%, Edwards Lifesciences +94% and Avago Technologies +93%.
Finding sales growth in 2015
The Goldman Sachs Portfolio Strategy Research has put together a chart listing the firms with the highest estimated sales growth in 2015. Not too surprisingly, social media giant Facebook tops the chart, with an estimated 37% sales growth in 2015. Retail pharmacy chain Walgreens Boots alliance came in second on Goldman’s top sales growth in 2015 list with 31% estimated sales growth next year. Third, fourth and fifth place all went to pharmaceutical companies. Moreover, Actavis, Alexion Pharmaceuticals and Regeneron Pharmaceuticals are all projected to see a robust 23% growth over the next 12 months.
Finding EPS growth in 2015
Kostin et al. also assembled a chart detailing the S&P 500 firms with the highest estimated earnings per share (EPS) growth in 2015. Megabank Citigroup is at the top of this chart, with the GS analysts anticipating a very strong 86% EPS growth in 2015. General Motors is in second place on the list with an estimated 61% EPS growth next year. Ford Motor Co. is also ready to rumble in 2015, with the Goldman team projecting the car maker’s EPS will jump 47% next year. Pharmaceutical firm Allergan came in fourth with 36% estimated EPS growth over the next 12 months. AbbVie ended up in fifth place, with a projected 2015 EPS growth of 33%.
According to Goldman
Financials was only the third sector since 1975 to represent 20% of the market capitalization of the S&P 500. However, Financials’ share of the S&P 500 market cap has declined from 22% to as low as 9% in early March 2009.
Change over time reflects both evolving industry fundamentals and the shifting composition of the S&P 500 Index constituents.