The end of the second quarter marks both the mid-point of 2014 and the mid-point of the Major League Baseball season. In terms of ratings, how have analysts performed to date regarding their aggregate calls on sectors in the S&P 500 at the start of the year? Have industry analysts hit the ball out of the park in terms of predicting the best performing sectors, or have they strikeout on their calls?
Home Runs: Energy and Health Care
On December 31, the Energy (59%) and Health Care (56%) sectors had the highest percentages of Buy ratings of all ten sectors in the S&P 500. Since that date, the Energy sector has recorded the second highest increase in price of all ten sectors at 11.7% (to 727.63 from 651.67), while the Health Care sector has recorded the third highest increase in price of all ten sectors at 9.7% (to 704.52 from 642.30). Thus, in aggregate, analysts have hit the ball out of the park on their calls on these two sectors to date.
Strikeouts: Utilities
On December 31, the Utilities (34%) sector had the lowest percentage of Buy ratings of all ten sectors in the S&P 500. Since that date, the Utilities sector has recorded the highest increase in price of all ten sectors at 16.4% (to 224.93 from 193.21). Thus, in aggregate, analysts have struck out on their calls on the Utilities sector through the first half of the year.
Second Half of the Season: No Changes to Lineup
Of the 10,702 ratings on S&P 500 companies at the end of the second quarter (June 30), 51.0% were Buy ratings, 43.4% were Hold ratings, and 5.5% were Sell ratings. During the second quarter, the overall number of ratings decreased by 1.5% (to 10,702 from 10,865).