Major U.S. benchmarks finished November with big gains on the back of a strong rally since Donald Trump's victory in the presidential election. Trump's promises, including expansion of infrastructure spending and tax cut proposals, boosted investors' sentiment throughout the month. Moreover, strong economic data and increased possibilities of a December hike led financial stocks to register huge gains.
Meanwhile, OPEC's decision to cut crude production on the last day of November was the cherry on top. In this scenario, it will be interesting to have a look at stocks that more than doubled in November. But before going into the discussion let's have a look at the performances of the U.S. benchmarks and major developments last month.
Trump Induced November Rally
While the start of the month was marked by uncertainties related to the presidential election, the major benchmarks gradually picked up pace following Nov 8 - the day of election results - when Republican Trump emerged victorious. After hitting multiple highs throughout the month, the Dow, S&P 500 and Nasdaq ended in positive territory for the month. While the Dow registered the biggest monthly gain in eight months of 5.4% last month, the S&P 500 and Nasdaq came up with 3.4% and 2.6% increase, respectively.
As mentioned above, Trump's different promises have played a vital role in boosting investor sentiment during the month. Moreover, a major part of the economic data including third quarter GDP, wage growth, inflation and housing data that released last month remained positive, indicating that the U.S. economy is on track to experience a far better second half of the year compared to the first.
Meanwhile, encouraging economic data has considerably increased the chances of a rate hike in the December policy meeting. This led financial stocks to emerge as the biggest gainer last month.
Moreover, small-cap companies were among the biggest gainers last month. The Russell 2000 index, which tracks the performance of small-cap stocks, was up 11% last month, registering the highest monthly increase in nearly five years. Separately, OPEC agreed to cut its output by over 1 million barrels a day in the Nov 30 meeting in Vienna. The decision led crude oil prices to rise more than 8% yesterday and led the energy sector to register more than 5% gain.
2 Stocks that More than Doubled in November
In this section we will focus on a couple of stocks that gained more than 100% last month and will also try to find out the key reasons behind their surge. Moreover, we will try to determine the near- term prospects of these stocks on the basis of some key fundamentals.
Health Insurance Innovations, Inc. HIIQ operates as a developer, distributor, and administrator of cloud-based individual health and family insurance plans. This Zacks Rank #1 (Strong Buy) company posted a robust return of 132.8% last month, surpassing the Zacks categorized Insurance-Life industry's gain of 13.8%. The strong rally witnessed since Trump's victory in the presidential election was the primary reason behind the huge gain. You can see the complete list of today's Zacks #1 Rank stocks here.
Since Nov '08, the company and the industry have gained 119.5% and 10%, respectively. During his campaign, Trump had indicated that his administration will work for deregulation in the financial industry, which is expected to boost the insurance sector.
The company recently provided an encouraging outlook for full year 2016 revenues and adjusted earnings per share (EPS), which also played a vital role in boosting the stock in recent times. The company forecasts 2016 revenues to come between $173 million and $178 million, compared to its earlier guided range of $170 million to $175 million. It also expects its adjusted EPS for the year to be within the range of 88 cents to 95 cents, better than its previous expectations of 85 cents to 92 cents. The company lifted its guidance on Nov 15 and registered a gain of around 53.4% since then.
Separately, strong EPS growth expectation for the current financial year and solid upward revision in earnings estimate for the current year indicate that the stock's near-term prospect is quite bright. HIIQ has an expected earnings growth rate of more than 100% for the current year compared with the industry average of 1.1%. Its earnings estimate for the current year has surged 47.6% over the last 30 days.
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Heat Biologics, Inc. HTBX is a biopharmaceutical company focusing primarily on the development and commercialization of novel allogeneic off-the-shelf cellular therapeutic vaccines. Shares of this Zacks Rank #2 (Buy) stock soared 124.2% in November, significantly higher than the Zacks categorized Medical-Drugs industry's gain of 7.3%.
The surge primarily came on the back of broad-based gains in the healthcare sector after Democrat Hillary Clinton lost the race to be the U.S. president. Clinton had protested strongly against drug price hikes and it was speculated that her win would have had a negative impact on the drug industry.
Separately, a major part of the company's gain came after it announced that it will attend the International Society for the Study of Lung Cancer Annual Meeting on Dec 6 at Vienna. In this meeting, the drug company is slated to declare top-line results from the Phase Ib study evaluating HS-110. Since its announcement on Nov 17, shares of Heat Biologics surged 103.4%. A significant rise in the company's earnings estimate for the current year also suggests that the rally may continue in the near future. Its earnings estimate for the current year has improved 17.2% over the last 30 days.
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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report HEALTH INS INN (HIIQ): Free Stock Analysis Report HEAT BIOLOGICS (HTBX): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research