Are These the Best Stocks for QE3?
The Federal Reserve ignited a fire in the financial market. On Thursday, the central bank’s Federal Open Market Committee announced another quantitative easing program, which takes aim at agency mortgage-backed securities. It will purchase $40 billion per month until there is “sustained improvement in the labor market.” Equities rallied across the board on the news.
The Dow Jones Industrial Average surged 206 points, while the S&P 500 and Nasdaq both jumped more than 1 percent. The Dow and S&P 500 both closed at their highest price value since December 2007. The Nasdaq finished at its highest level since November 2000, bringing back memories of the tech bubble. Ten percent of the Nasdaq 100 closed at new highs, while 21 percent of the S&P 500 finished at new highs.
Don’t Miss: QE3: Here’s Your Cheat Sheet
Although the Fed pouring more gasoline on the market causes a melt up in many stocks, some flames burn higher than others. Goldman Sach’s (NYSE:GS) equity research team recently compiled a list of the 30 stocks that have outperformed their sectors around the previous five Federal Reserve QE statements, including Operation Twist and its extension. The price movement of the stocks are based on two weeks prior and six weeks after the previous stimulus announcements.
Listed below are the top 30 names along with their median percentage outperformance, according to Goldman Sachs and Business Insider.
SanDisk (NASDAQ:SNDK) 23 percent
Schnitzer Steel (NASDAQ:SCHN) 21 percent
Nuance Communications (NASDAQ:NUAN) 20 percent
Convergys (NYSE:CVG) 16 percent
Lennar (NYSE:LEN) 14 percent
Steel Dynamics (NASDAQ:STLD) 14 percent
Concur Tech (NASDAQ:CNQR) 14 percent
KKR & Co. (NYSE:KKR) 14 percent
CenturyLink (NYSE:CTL) 13 percent
Arrow Electronics (NYSE:ARW) 13 percent
Penske Automotive Group (NYSE:PAG) 12 percent
ViroPharma (NASDAQ:VPHM) 11 percent
Protective Life (NYSE:PL) 11 percent
Dick’s Sporting Goods (NYSE:DKS) 11 percent
Ultimate Software Group (NASDAQ:ULTI) 11 percent
Group 1 Automotive (NYSE:GPI) 10 percent
Great Plains Energy (NYSE:GXP) 9 percent
ONEOK (NYSE:OKE) 9 percent
The Home Depot (NYSE:HD) 9 percent
Affiliated Managers Group (NYSE:AMG) 9 percent
Netgear (NASDAQ:NTGR) 9 percent
Leap Wireless International (NASDAQ:LEAP) 8 percent
Worthington Industries (NYSE:WOR) 7 percent
Reliance Steel and Aluminum (NYSE:RS) 7 percent
TE Connectivity (NYSE:TEL) 7 percent
Louisiana-Pacific (NYSE:LPX) 7 percent
Textron (NYSE:TXT) 6 percent
Felcor Lodging Trust (NYSE:FCH) 5 percent
KLA-Tencor (NASDAQ:KLAC) 5 percent
Brinker International (NYSE:EAT) 4 percent
Teradata (NYSE:TDC) 4 percent
FMC Tech (NYSE:FTI) 3 percent
Monsanto (NYSE:MON) 3 percent
Investor Insight: QE3 BUILDS Momentum for Financials
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