3 Stocks That Historically Soar in the Second Half
Investing.com | Jul 05, 2023 05:29AM ET
- S&P 500's +10% H1 rise usually leads to a positive performance in H2
- And certain stocks, on average, outperformed the S&P 500 by +35.5% in the second half following the index's rise
- Let's take a look at three such stocks using InvestingPro
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The S&P 500, though lagging behind the Nasdaq, has performed very well so far this year.
While it's important to remember that past performance does not guarantee future returns, let's analyze three stocks that have historically rallied in the second half of the year after the S&P 500 rose more than 10% in the first half.
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1. Micron Technology
Founded in 1978 and headquartered in Boise, Idaho, United States, Micron Technology (NASDAQ:MU) is a leading manufacturer of memory chips for computers. They also market their consumer products under the brand name Crucial Technology and are ranked among the top 5 largest semiconductor manufacturers worldwide.
In the past five instances when the S&P 500 rose more than 10% in the first half of the year, Micron Technology shares experienced an average increase of 60% in the second half, spanning from July 1 to December 31.
Additionally, Micron Technology announced a dividend distribution to its shareholders on July 25. Throughout the year, they will pay out $0.46 per share each quarter ($0.115). To be eligible for this dividend, investors must hold shares before July 7. The dividend yield is 0.73%.
Source: InvestingPro
Mark your calendars for September 26 as Micron Technology is set to present its next earnings report. In the previous report on June 28, the company surpassed expectations with higher-than-anticipated actual revenues.
The strong performance of Micron can be attributed to the increasing demand for its memory chips, primarily driven by the thriving artificial intelligence sector. Looking ahead to the upcoming quarter, the company is optimistic about achieving sales of approximately $4.1 billion.
However, it's worth noting that recent declines in Micron's stock can be attributed to new export restrictions imposed by the United States on artificial intelligence chips destined for China.
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The Department of Commerce has implemented these measures out of concern over potential risks associated with the use of AI in weapons development and hacking. Consequently, chip shipments to China will be prohibited starting this July.
From a technical perspective, we observe that the first Fibonacci level at $64.80 has proven to be a strong support level, as the price bounced back up from $64.80 to $70.50.
The second Fibonacci level sits at $61.72, coinciding closely with the 200-day moving average. This convergence suggests that it could serve as a potential area for an upward rebound.
2. KLA
KLA Corporation (NASDAQ:KLAC), formerly known as KLA-Tencor Corporation, is a prominent global leader in the design, production, and commercialization of advanced semiconductor production process control and improvement techniques.
In the past five instances when the S&P 500 experienced a rise of more than 10% in the first half of the year, KLA Corporation's shares demonstrated an average increase of 44% in the second half, spanning from July 1 to December 31.
On April 26, KLA Corporation announced its quarterly results, surpassing market expectations. The company reported earnings per share (EPS ) of $5.49, exceeding the projected EPS of $5.36 by $0.13. The actual earnings also outperformed expectations.
The next earnings report from KLA Corporation is scheduled for July 27.
Source: InvestingPro
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