In a market downturn, even one that is relatively mild, I run scans for stocks that are outpacing the benchmark index -- in other words, those that are resisting the correction.
The most obvious sector that rose to the top of my screens was homebuilding. Pulte Homes (PHI), M/I Homes (MHO), Ryland (RYL) and Lennar (LEN) are some of the best performers at the moment.
Also showing strength were related companies, such as flooring retailer Lumber Liquidators (LL) and real estate investment trust Walter Investment Management (WAC), which invests in subprime and other credit-sensitive loan. While that was no surprise, given some better recent data on the housing market, I wanted to dig deeper and see which other sectors may be outperforming the broader market.
Several oil-and-gas names were in the ranks of top performers. Gulfport Energy (GPOR), an Oklahoma City-based explorer and producer, was down about 1.9% for the week mid-session Friday. That was a slightly bigger decline than the benchmark index, but Gulfport was holding about 6.1% above its 10-week average, whereas the SPDR S&P 500 (SPY) was trading below that line Friday.
Gulfport is a mid-cap name, with market capitalization of $1.7 billion. Though it has good liquidity, moving more than 1 million shares per day on average, it is volatile, with a beta of 2.24.
The company is expected to report its third quarter sometime around Nov. 1. Wall Street is eyeing income of $0.38 per share on revenue of $62.32 million.
That would be a decrease on the bottom line, but an increase on the top line -- the opposite of what many companies have been doing this earnings season.
Gulfport missed earnings views in the past two quarters.
Another stock faring better than the broader market is Calumet Specialty Products Partners (CLMT). The oil-and-gas refiner and marketer was holding about 5.6% above its 50-day average Friday, and about 6% below its 52-week high of $33.96, which the stock hit Oct. 5.
Calumet skidded more than 12% in heavy volume in the week ended Oct. 12, but it met with support at its 10-week line, and has been in rebound mode for the past two weeks.
The stock sports a healthy dividend yield of 7.7%.
The company is scheduled to report its third quarter Wednesday before the open. Analysts have pegged earnings at $0.60 a share and revenue at $946.12 million, both increases over the year-earlier quarter. Calumet beat views in three of the past four quarters.
The earnings- and revenue-growth trends have been headed in the right direction. Year-over-year income growth has been accelerating for the past three quarters. Sales grew at rates of 20% or higher in each of the past three quarters.
Calumet is expected to more than triple its earnings this year -- to $3.36 per share. Analysts have revised earnings estimates higher twice in the past 30 days.
