We've closed the books on the first month of 2021. Equities started off on solid footing, but for the most part they ended the month very differently. This was evidenced by the mixed performance of the major U.S. stock market barometers for the month. Small cap stocks finished January in the pole position, as the Russell 2000 moved 5% higher for January. The S&P 500, however, shed 1.1% and the Dow Jones industrial average fell 2%.
Easily outpacing those market indexes in 2020, the Real Money Post Industrial Average (RMPIA) had gained 34.7% over the year. But it finished down 1.7% in January.
Digging into RMPIA's January performance we find 12 of its constituents outperformed the major market indexes, led by the 26% jump in the shares of Walgreens Boots Alliance (WBA) . Close behind was the 15.4% climb in Biogen (BIIB) shares with the 12.6% move higher in Gilead Sciences (GILD) , rounding out the top three performers for the month. While those three constituents had meaningful share price performance during the month, collectively they account for just 4.2% of RMPIA's overall composition.
By comparison, shares of Apple (AAPL) , Amazon (AMZN) , Alphabet (GOOGL) , Facebook (FB) , and Mastercard (MA) collectively comprise 42.5% of RMPIA. In other words, those five stocks along with the sixth largest holding -- Qualcomm (QCOM) -- were responsible for the majority of the January move in RMPIA. While shares of Alphabet rose 4.3% in January, that was more than offset by the 11.4% decline in Mastercard shares and the smaller declines posted by Apple, Facebook, and Amazon shares.
As we enter February, the next few weeks will see roughly 60% of the S&P 500 report December-quarter results and, in some cases, offer their outlook for the coming quarter or the coming year. Current consensus estimates put 2021 EPS for the S&P 500 at $172.05, up 24.3% vs. 2020 and 5.8% compared to 2019. Prospects for EPS growth in the coming year at RMPIA are considerably quicker -- tallying the consensus estimates for the RMPIA constituents points to aggregate EPS growth of 27% in 2021 vs. 2020 and 10.1% vs. 2019. Roughly two-thirds of the constituents are slated to deliver double-digit EPS growth over the coming year led by Starbucks (SBUX) , Netflix (NFLX) and Qualcomm. Only some constituents are currently forecast to see their EPS contract year-over-year -- Gilead, Kraft Heinz (KHC) , Salesforce (CRM) and Biogen.
Over the next few weeks, as more than 2,000 companies report quarterly results, we'll be monitoring consensus EPS revisions for RMPIA. Given prospects for the global economy to improve in the second half of the year as vaccination levels improve, plus the tailwinds associated with 5G, digital shopping, contact-free payments, video streaming and working-and-learning-from-home trends, we strongly suspect RMPIA's EPS prospects will continue outperform the S&P 500. And I'd remind fellow investors that historically faster earnings growth tends to drive multiple expansion greater than that being accorded to the S&P 500. The combination of those two prospects should translate into RMPIA once again outperforming in the months to come.
(CRM, SBUX, MA, FB, GOOGL, AMZN,and AAPL are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.)
