The S&P 500 (SNPINDEX:^GSPC) has done quite well in the first half of the year, setting numerous records and climbing by about 8% in the year. Some stocks within the S&P 500 have done far better in leading the index higher, and just a handful of stocks have produced gains of 50% or more. Among them are Vertex Pharmaceuticals (NASDAQ:VRTX), Activision Blizzard (NASDAQ:ATVI), and Wynn Resorts (NASDAQ:WYNN), and the success they've had so far in 2017 could very well continue into the second half of the year and beyond.
Vertex looks healthy
Vertex Pharmaceuticals leads the S&P 500 so far in 2017, with a gain of almost 75%. Most of the biotech company's rise came in late March, when Vertex announced the results of two key phase 3 studies of the company's tezacaftor treatment for cystic fibrosis. The larger Evolve trial found that a combination of tezacaftor and the already-approved Vertex cystic fibrosis drug Kalydeco improved lung function compared to a placebo, while the Expand study found that tezacaftor and Kalydeco combined outperformed not only the placebo but also Kalydeco by itself. The study results opened the door to an expanded population of patients that Vertex might be able to serve, and that allowed Vertex to hold onto its competitive edge over other companies operating in the cystic fibrosis space.
Looking forward, Vertex has high hopes for Kalydeco and its Orkambi combination therapy sales to keep rising. Additional approvals from the U.S. Food and Drug Administration in the months and years to come will only bolster Vertex's status in fighting cystic fibrosis, and investors are excited about the likelihood of favorable action from the FDA in the near future.
Activision wins the game
Activision Blizzard has also seen very good performance in 2017, posting a 60% return. Regular gains have come throughout the period for Activision, beginning with February's rise after the video-game maker reported its holiday-period earnings. Quarterly sales climbed by nearly half, sending earnings per share up by an even faster 57%. Similar-sized rises came in May after Activision's first-quarter results, which included more modest gains in revenue but also revealed the success of the new game franchise Overwatch. The company's World of Warcraft service continues to churn out revenue, and its contribution to digital revenue in particular has been encouraging for investors.
Activision has pressed hard to take advantage of good conditions in the video game industry. Between Call of Duty and other premier Activision games, the King Digital division and its Candy Crush franchise, and the potential for new development across the company, investors see good things ahead for the game maker. That could send the stock even higher if those prospects pan out well.
Finally, Wynn Resorts has recovered nicely in 2017, bouncing back as the health of the gambling market in the Asian gaming capital of Macau has kept improving. Even though the Chinese government has been mercurial in its regulatory efforts to keep control of Macau, Wynn has benefited greatly from the opening of the new Wynn Palace. Indeed, the new properties in Macau have created a positive feedback loop, drawing curious visitors that in turn lift Wynn's prospects even further.
Things look even better for Wynn Resorts in the near future. The Wynn Palace has already cannibalized business from competitors in Macau, and the casino resort operator also expects to make improvements to its Las Vegas properties. The development of a brand-new resort just outside Boston and the potential for getting admission to the soon-to-open Japanese gaming market all point to accelerating growth ahead. Wynn looks like a good bet for those who believe in the sustainability of Macau's rebound.
The S&P 500 has done well so far in 2017, and these three stocks have played a pivotal role. If they can continue to rise, then they could help support further gains for the market for the rest of the year and into 2018.
Dan Caplinger owns shares of Wynn Resorts. The Motley Fool owns shares of and recommends Activision Blizzard. The Motley Fool recommends Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.
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