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These S&P Stocks Jumped 50% in the 1st Quarter

By Dan Caplinger – Apr 7, 2018 at 10:48AM

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Find out which companies helped support a weak market.

The S&P 500 (^GSPC -1.51%) didn't live up to investors' expectations to begin 2018. The widely followed benchmark index dropped just over 1% during the first quarter, breaking a long string of winning periods during the bull market.

Yet among the 500 stocks in the index, there were actually some that did quite well during the quarter despite the overall market's losses. In particular, three stocks managed to post gains of 50% or more, and many investors think that these companies have even more room for gains in the future. Let's look a little more closely at the big S&P winners.

S&P 500 winners from 2018's first quarter


Total Return

Nektar Therapeutics (NKTR 5.26%)


XL Group (XL)


Netflix (NFLX -1.78%)


Data source: Yahoo! Finance.

Nektar keeps soaring

Nektar Therapeutics' gains during the quarter came in several waves. In early January, Nektar presented promising news about its drug pipeline at the J.P. Morgan Healthcare Conference. Of note: The company said that it expects to submit its NKTR-181 slow-release painkiller for approval with the U.S. Food and Drug Administration. Moreover, a host of other promising treatments against cancer and autoimmune diseases are progressing through clinical trials well, and investors have high hopes that several of Nektar's candidate treatments will gain FDA approval in the years ahead.

Nektar got even more popular once it released its quarterly results. A sub-licensing agreement helped send revenue soaring, and losses were narrower than many had expected. With key collaborations with major players in the pharmaceutical industry, Nektar has a lot of room to ride the success of its drug pipeline, and some investors think that there are considerable chances that the company will receive an acquisition bid at some point.

Two-story office building with landscaping and Nektar logo on wall.

Image source: Nektar Therapeutics.

XL gets an offer

Speaking of acquisitions, insurance company XL Group owes its big gain in the first quarter to interest from a would-be acquirer. XL got a bid from French peer AXA in an effort to create the largest property and casualty insurance company in the world. Under the terms of the $15.3 billion offer, XL shareholders should receive $57.60 per share in cash.

Consolidation in insurance is common after tough years, and 2017's destructive hurricane season was particularly harsh on both regular insurance and reinsurance operations. Some investors are nervous that the plans to capitalize on increased scale could backfire if AXA can't control the larger risks involved in concentrating insurance exposure. XL investors nevertheless seem confident that the deal will go through, with share prices only a little below the offer price.

A winner in streaming

Netflix needs no introduction, as the streaming video giant has become a household name across the globe. Much of the gains that Netflix earned this quarter came from the first results following its price increase late in 2017, which showed that the service continues to command loyalty even when the company makes marginal boosts to its cost to customers. Despite criticism from short-selling specialists asserting that Netflix lacks a competitive moat, the company has done well with its newly produced content and international expansion.

Future gains for Netflix aren't assured, but the company remains fundamentally strong. As it brings more content in-house, Netflix might be able to cut its overall costs and become less reliant on popular franchises from outside its ecosystem to bring in and keep viewers. The better the Netflix experience gets, the more likely it is that the stock will climb further.

Keep your eye on the market

The S&P 500 could remain choppy for the foreseeable future, especially if various market-moving tensions persist. Yet these three stocks have done well, and although XL's further gains are capped, Netflix and Nektar could give investors more in the months ahead.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Netflix. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$235.44 (-1.78%) $-4.27
Nektar Therapeutics Stock Quote
Nektar Therapeutics
$3.20 (5.26%) $0.16
XL Group Ltd Stock Quote
XL Group Ltd
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$3,585.62 (-1.51%) $-54.85

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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