With investors enjoying a rare three-day weekend thanks to Good Friday, and basking in a fresh all-time closing high for the S&P 500, I thought it important to take the time to review the index’s top five performers in the first-quarter to see if they offer any clues as to which may roll its gains into the second quarter.
Netflix, Inc. (NASDAQ:NFLX) + 104.4%
Netflix, Inc. (NASDAQ:NFLX) was the best performer within the S&P 500 by a mile. Netflix more than doubled up for shareholders after showing the benefits of content streaming, both domestically, and abroad. Despite seeing a continued slowdown in its traditional DVD business, Netflix, Inc. (NASDAQ:NFLX) added 2 million streaming customers domestically, and an additional 1.8 million abroad. Furthermore, streaming gross margin came in higher than anyone had expected, resulting in a $0.13 fourth-quarter profit, when Wall Street had been anticipating a $0.13 loss per share.
Best Buy Co., Inc. (NYSE:BBY) + 88.4% (dividend-adjusted)
Big-box retailer Best Buy Co., Inc. (NYSE:BBY) turned in a phenomenal performance in the first-quarter for a company that many had left for dead. Best Buy Co., Inc. (NYSE:BBY)’s turnaround strategy – which involves downsizing its stores, focusing on mobile products like smartphones and tablets, incentivizing its employees with sales bonuses and, most importantly, matching competitor’s prices — appears to be working like a charm. The company left its dividend untouched at $0.17 per quarter, and reversed a string of same-store sales declines by posting a 0.9% same-store sales increase over the year-ago period.
Hewlett-Packard Company (NYSE:HPQ) + 68.4% (dividend-adjusted)
Like Best Buy Co., Inc. (NYSE:BBY), HP was left for dead by shareholders at the beginning of the year after unveiling sweeping reforms and job cut plans last year. However, HP put some of those dissenters on the back burner after reporting better-than-expected first-quarter earnings in February. HP’s revenue of $28.4 billion, and its EPS forecast for 2013 of $2.30-$2.50, was markedly higher than the $27.8 billion that the Street had expected, and the $2.10-$2.30 that HP’s management had previous projected.
H&R Block, Inc. (NYSE:HRB) + 59.5% (dividend-adjusted)
Tax preparation service H&R Block delivered a nearly 60% gain in the first-quarter to shareholders despite just weeks ago running into a snafu with its at-home tax preparation software that modestly delayed up to 660,000 returns. H&R Block, which derives nearly all of its profits between the end of January and April 15, anticipates filings will be up by 1%-2% this year, and CEO Bill Cobb noted three weeks ago that he felt H&R Block was outperforming its competitors.
Micron Technology, Inc. (NASDAQ:MU) + 57.3%
Memory chip maker Micron snagged the fifth-best performance within the S&P 500 this quarter in anticipation of stronger margins and decreasing costs, which should help its bottom line performance. Handily topping Wall Street’s revenue expectations in its second-quarter results, Micron has benefited from robust smartphone and tablet sales, as well as demand for data center infrastructure.