Make it two months in a row: The S&P 500 delivered a positive gain in both March and April after declining in February.
As is always the case, some stocks in the major index were bigger winners last month than others. Three stocks even soared close to 18% or more. Can you still buy the S&P 500's best-performing April stocks?
1. Chipotle Mexican Grill
Chipotle Mexican Grill (CMG 6.33%) ranked as the S&P 500's top stock last month. Shares of the restaurant chain soared 21% in April.
Most of Chipotle's nice gain came after the company reported its first-quarter earnings results on April 25. Chipotle easily topped Wall Street estimates for the quarter. Revenue jumped 17% year over year to $2.4 billion, while earnings nearly doubled to $10.50 per share.
But is it now too late to buy Chipotle stock? I think so. Even though the company plans to open between 255 and 285 new restaurants this year, its sales growth is likely to slow to the mid-to-high single-digit range.
The main problem is that Chipotle's shares trade at nearly 42 times forward earnings. With that kind of nosebleed multiple, investors should demand much higher growth.
2. Universal Health Services
Universal Health Services (UHS -0.48%) came in as the second-best stock in the S&P 500 last month. Shares of the hospital operator vaulted more than 18% higher.
As was the case with Chipotle, UHS delivered a solid gain in April, thanks mainly to its Q1 update. The company also reported its Q1 results on April 25. They were better than expected, with net revenue increasing more than 5% year over year to nearly $3.5 billion and adjusted earnings rising almost 9% to $2.34 per share.
UHS appears to be moving past the COVID-19 headwinds that have been challenging it over the past three years. Its behavioral health hospitals are performing especially well, with net revenue per adjusted patient day rising 5% year over year in Q1.
Valuation isn't a concern with this stock: Its shares trade at only 14.5 times expected earnings. However, I don't think that UHS is likely to keep up the current momentum. My view is that there are better S&P 500 stocks to buy right now.
3. Intuitive Surgical
Intuitive Surgical (ISRG -0.50%) lagged behind UHS only a little in April. Shares of the robotic surgical systems maker jumped nearly 18% last month.
Once again, positive Q1 results served as the big catalyst here. Intuitive reported first-quarter revenue of $1.7 billion, up 14% year over year. This improvement was driven by da Vinci procedure volume growth of 26%.
Intuitive Surgical's story should continue to improve. COVID-19 isn't as disruptive to the company's business as it has been in the past. Intuitive won European certification for its Ion endoluminal system in March 2023. That paves the way for an initial launch in the United Kingdom. The company also received U.S. Food and Drug Administration clearance in April for the da Vinci SP surgical system for simple prostatectomy.
The primary negative for Intuitive is its lofty valuation, with shares trading at 50 times forward earnings. However, this stock has historically been priced at a premium.
There's no guarantee that Intuitive Surgical will deliver huge gains throughout the rest of 2023. But I view it as one of the best healthcare stocks to buy right now for long-term investors because of its exceptional growth prospects.
