12 S&P 500 Stocks On the Move

Published on January 22, 2024 at 11:02 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the 12 S&P 500 stocks on the move. If you want to skip our detailed analysis of these stocks, go directly to 5 S&P 500 Stocks On the Move.

The United States economy has continued to defy expectations of a macro slowdown over the past few months and looks set to grow at a healthy pace in the first quarter of 2024. Recent figures from the Labor and Commerce departments in the US government indicate that jobs are being added to the economy at a brisk pace and strong retail sales, especially in motorsports and online purchases, have forced experts to revise growth estimates upwards. Fed Governor Christopher Waller said earlier this week the economy was doing well and this had given the central bank some flexibility to move carefully on monetary policy.

In the first employment report of the new year, the Labor Department revealed that nonfarm payrolls increased by 216,000 jobs in December, beating forecasts by around 36,000 jobs. Per the latest data, the economy added 2.7 million jobs in 2023, down from 4.8 million in 2022. The decline should be seen in context of the 525 basis points worth of rate hikes by the Fed since the second quarter of 2022. Leisure, business, government, and manufacturing all registered increases in jobs. Average hourly earnings rose 0.4% in December, matching the gain in November. This raised the year-on-year increase in wages to 4.1% from 4.0% in November.

The Consumer Inflation report released by the Commerce Department also boosted investor confidence in the market. Retail sales climbed 0.6% in December after a 0.3% gain in November, beating forecasts that retail sales would only gain 0.4%. Sales increased 5.6% on a year-on-year basis in the month of December. The latest growth figures have forced experts to revise expectations of a rate cut in March to 55% from 65%. The benchmark indexes, like the S&P 500, seem unaffected by these moves, largely trading flat over the past month, as the dollar rises and Treasury values fall.

Some of the S&P 500 stocks on the move as the new year gets underway include NVIDIA Corporation (NASDAQ:NVDA), Intuitive Surgical, Inc. (NASDAQ:ISRG), and Moderna, Inc. (NASDAQ:MRNA). Investors should closely monitor these stocks in the next few weeks to take advantage of upcoming growth catalysts. Gary Guthart, the CEO of Intuitive Surgical, Inc. (NASDAQ:ISRG), recently outlined during the third quarter earnings call that his firm was focused on expanding internationally and bringing down the cost of products for newer platforms.

“Areas of opportunity include our Ion program, our SP accessories portfolio, and our multiport accessories and advanced instrument lines. Given the timing of facilities completion, manufacturing efficiency improvements for new products, and other complex projects, we expect variability in gross margin over the coming quarters as we work through these programs. Turning to our digital offerings. [inaudible] for digital tools and channels is growing nicely.

Our SimNow surgical simulators are installed at the majority of our customer sites, and subscription renewal rates are outstanding. Routine use of My Intuitive app by over 10,000 da Vinci surgeons grew by 140% year over year and is receiving strong Net promoter scores that continue improving over time. Our Intuitive Hub media management and telepresence system installations grew 58% in the quarter, and the hub-captured surgical cases grew 61%. In closing, core demand is healthy.

We’re focused on extending our ecosystem internationally and driving our product costs down, particularly for our newer platforms. We are dogged in pursuit of significant long-term opportunity to improve the Quadruple Aim using our integrated ecosystem powered by analytics, and we are pacing our investments to catalyze that opportunity. “

Photo by Ruben Sukatendel on Unsplash

Our Methodology

These thirty best-performing stocks on the S&P 500 over the past month were shortlisted and the top twelve selected. The analyst ratings of each stock are also discussed to provide readers with some context for their investment choices. The hedge fund sentiment around each stock was calculated using the data of around 900 hedge funds tracked by Insider Monkey in the third quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.

S&P 500 Stocks On the Move

12. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)

Number of Hedge Fund Holders: 57

Return Over Past Month as of January 18: 6.2%

Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is a biotech firm that develops therapies for the treatment of cystic fibrosis. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) shares have rallied since the firm announced earlier this month that Casgevy, a gene therapy developed by the firm, had been approved by Saudi Arabian regulators for the treatment of sickle cell disease and transfusion-dependent beta thalassemia in people aged 12 years or older. The company noted that Saudi Arabia has one of the highest rates of the genetic blood disorders in the world.

At the end of the third quarter of 2023, 57 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), compared to 54 in the previous quarter worth $1.9 billion.

Just like NVIDIA Corporation (NASDAQ:NVDA), Intuitive Surgical, Inc. (NASDAQ:ISRG), and Moderna, Inc. (NASDAQ:MRNA), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is one of the S&P 500 stocks on the move.

In its Q2 2023 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) was one of them. Here is what the fund said:

“Notable adds in the quarter included Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and Intuit. Vertex is one of the only pharmaceutical companies in the world with an effective drug for cystic fibrosis, but the market has deemed it a slow-growth company due to existing market penetration. However, the drug is enabling patients to live longer, and the drug’s patient base is growing. Also, the company is developing a more potent formulation that we believe could increase efficacy while giving Vertex an opportunity to reprice and improve margins. Finally, its cystic fibrosis franchise is very cash generative, and the company has been using the capital to invest in a pipeline that we believe includes some interesting longer term opportunities. We added to the position after a couple of positive developments this quarter. First, its competitive position strengthened when a competitor, AbbVie, announced it will discontinue all work in cystic fibrosis. Second, there have been positive developments from the company’s pipeline, including encouraging early-stage results for a Type 1 diabetes stem cell therapy.”

11. Fastenal Company (NASDAQ:FAST)

Number of Hedge Fund Holders: 33

Return Over Past Month as of January 18: 6.3%

Fastenal Company (NASDAQ:FAST) engages in the wholesale distribution of industrial and construction supplies. Fastenal Company (NASDAQ:FAST) stock has surged after the firm posted earnings for the fourth quarter of 2023, beating market estimates on earnings per share and revenue by $0.01 and $10 million respectively. The firm also announced a 3% increase in the quarterly dividend.

At the end of the third quarter of 2023, 33 hedge funds in the database of Insider Monkey held stakes worth $529 million in Fastenal Company (NASDAQ:FAST), compared to 31 the preceding quarter worth $653 million.

10. Meta Platforms, Inc. (NASDAQ:META)

Number of Hedge Fund Holders: 234

Return Over Past Month as of January 18: 9%

Meta Platforms, Inc. (NASDAQ:META) is a tech firm that owns and runs social media platforms. Meta Platforms, Inc. (NASDAQ:META) stock has climbed in the past few weeks as analysts expect the company to beat market estimates on revenue in the fourth quarter of 2023 despite headwinds like job cuts, TikTok popularity, and lawsuits. The firm has been capitalizing on catalysts like artificial intelligence innovations, secular digital ad trends and a leaner cost structure, according to analyst Brian White at investment firm Monness Crespi.

At the end of the third quarter of 2023, 234 hedge funds in the database of Insider Monkey held stakes worth $35 billion in Meta Platforms, Inc. (NASDAQ:META), compared to 225 in the preceding quarter worth $30 billion.

In its Q3 2023 investor letter, Weitz Investment Management, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:META) was one of them. Here is what the fund said:

“As for other quarterly contributors, Alphabet, Inc., (GOOG) and Meta Platforms, Inc. (NASDAQ:META) added to their exceptional year-to-date returns. Meta Platforms and Alphabet were the true year-to-date standouts. After steep declines in 2022, both stocks rebounded sharply due to a combination of solid fundamentals, disciplined operational execution, and improved sentiment. Despite outsized gains and attention, we think both Alphabet and Meta remain undervalued.”

9. McKesson Corporation (NYSE:MCK)

Number of Hedge Fund Holders: 58

Return Over Past Month as of January 18: 9.5%

McKesson Corporation (NYSE:MCK) provides healthcare services. McKesson Corporation (NYSE:MCK) stock has been on the move in the past few weeks on the back of reports that the company is planning to sell the Rexall pharmacy chain it owns in Canada. The former acquired the latter in a deal worth more than $2 billion in 2016. Rexall operates around 400 pharmacies in Canada.

Among the hedge funds being tracked by Insider Monkey, Connecticut-based firm Viking Global is a leading shareholder in McKesson Corporation (NYSE:MCK) with 1.4 million shares worth more than $633 million.

In its Q3 2023 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and McKesson Corporation (NYSE:MCK) was one of them. Here is what the fund said:

“Partially offsetting the above was favorable stock selection in pharmaceuticals and health care distributors along with cash exposure in a declining market. Strength in pharmaceuticals and health care distributors was driven by gains from Lilly and McKesson Corporation (NYSE:MCK). McKesson’s stock performed well due to strong financial results in the company’s pharmaceutical distribution and prescription technology solutions businesses, driven in part by higher volumes of GLP-1 medicines and prior authorization technology services related to GLP-1 medicines.”

8. ANSYS, Inc. (NASDAQ:ANSS)

Number of Hedge Fund Holders: 32

Return Over Past Month as of January 18: 10.5%

ANSYS, Inc. (NASDAQ:ANSS) develops and markets engineering simulation software and services worldwide. ANSYS, Inc. (NASDAQ:ANSS) stock has rallied on the back of reports that the firm would be acquired by software firm Synopsys in a deal worth $35 billion. On January 16, these reports were confirmed by the latter. The combined company expects to achieve nearly $400 million of run-rate cost synergies by year three post-closing and around $400 million of run-rate revenue synergies by year four post-closing, growing to more than $1 billion annually in the longer-term.

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Impax Asset Management is a leading shareholder in ANSYS, Inc. (NASDAQ:ANSS) with 640,715 shares worth more than $190 million.

7. Merck & Co., Inc. (NYSE:MRK)

Number of Hedge Fund Holders: 85

Return Over Past Month as of January 18: 10.7%

Merck & Co., Inc. (NYSE:MRK) operates as a healthcare company worldwide. Earlier this month, Merck & Co., Inc. (NYSE:MRK) announced that drug authorities in the United States had approved Keytruda, an oncology drug developed by the firm, in combination with chemoradiotherapy, for the treatment of FIGO 2014 Stage III-IVA cervical cancer. The approval has increased investor confidence in the famous drugmaker that recently acquired immunotherapy developer Harpoon Therapeutics in a deal worth $680 million.

At the end of the third quarter of 2023, 85 hedge funds in the database of Insider Monkey held stakes worth $5 billion in Merck & Co., Inc. (NYSE:MRK), compared to 78 in the previous quarter worth $2.6 billion.

6. Viatris Inc. (NASDAQ:VTRS)

Number of Hedge Fund Holders: 43

Return Over Past Month as of January 18: 12.6%

Viatris Inc. (NASDAQ:VTRS) makes and sells generic drugs. Viatris Inc. (NASDAQ:VTRS) shares have climbed over the past few days after the firm presented future growth plans at the JPMorgan Health Conference, detailing that it plans to generate more than $2.3 billion in free cash flow over the next three to five years. It also revealed that it would reinvest 50% of the free cash flow into the business while the rest would be given to shareholders in quarterly dividends and share buybacks.

At the end of the third quarter of 2023, 43 hedge funds in the database of Insider Monkey held stakes worth $952 million in Viatris Inc. (NASDAQ:VTRS), up from 42 in the preceding quarter worth $1.1 billion.

In addition to NVIDIA Corporation (NASDAQ:NVDA), Intuitive Surgical, Inc. (NASDAQ:ISRG), and Moderna, Inc. (NASDAQ:MRNA), Viatris Inc. (NASDAQ:VTRS) is one of the S&P 500 stocks on the move.

In its Q3 2023 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Viatris Inc. (NASDAQ:VTRS) was one of them. Here is what the fund said:

“In the attractive healthcare sector, we look beyond the obvious to identify businesses that simultaneously have exposure to this growth industry and also trade at low prices. We’re especially drawn to companies like Viatris, whose products or services play a part in helping to mitigate healthcare’s constantly rising costs. The healthcare industry has been a growing part of the U.S. economy for decades. As a result, many companies in this sector trade at high valuations reflecting their robust but well-known reputation for growth. For value-conscious investors like us, investing in healthcare requires looking beyond the obvious to identify businesses that have exposure to this growth industry but which trade at low prices. Furthermore, recognizing that the constantly rising cost of healthcare cannot go on forever, we have been particularly drawn to companies whose products or services play some role in managing or reducing the cost of care. As a result, we have positions in Viatris, a leading manufacturer of low-cost branded generic drugs.”

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