Six surprise winners in this year’s stock market

The New York Lottery might lend its old slogan to the stock market: Hey, you never know.

Several stocks have beaten the market this year that might surprise you. Take General Motors Corp. (GM) for instance. It’s up 19% this year through Sept. 26, even though U.S. car sales are only so-so.

D.R. Horton Inc. (DHI), the largest U.S. homebuilder, is another case in point. It’s up 21% year-to-date, even though new-home sales have been punk because of unpleasantly high mortgage rates.

The overall market is up about 14% this year.

Let’s have a look at half a dozen winners that probably surprised most market observers.

General Motors

In 2024, General Motors Co. sold 2.7 million cars and light trucks in the U.S., holding onto the No. 1 spot ahead of Toyota Motor Co. (TOY), which sold 2.3 million, and Ford Motor Co. (F), which sold 2.25 million.

President Donald Trump’s tariffs are a mixed blessing for General Motors. It gets some protection from Japanese and European imports. But it pays more for parts and subassemblies it imports.

Auto stocks usually sell for a low multiple of earnings because their earnings are so cyclical. GM has had only one annual loss in the past decade (in 2017), but, in the Great Recession year of 2008 it had a gigantic loss and had to be rescued by the federal government.

D.R. Horton

The news on homebuilders has been downbeat for more than a year. House prices are too steep, the prevailing line goes, and mortgage rates are forbidding.

What the pessimists don’t focus on is that there is large pent-up demand for housing, especially single-family houses.

Horton has a better balance sheet than many of its peers, with debt only about 30% of stockholders’ equity. And, as the largest company in the industry, it has economies of scale. In addition, its 10-year revenue growth rate is nearly 18%.

State Street

State Street Corp. (STT), based in Boston, is a leading servicer of mutual funds and a major issuer of exchange traded funds (ETFs) under the SPDR brand. These include the popular S&P 500 ETF which trades under the stock symbol SPY.

State Street shares are up 18% year-to-date, thanks in large part to the ongoing trend toward index investing. Earnings have jumped more than 20% in the past year.

Like many financial stocks (and unlike many tech and biotech stocks), these shares carry no glamor premium. They trade at less than 13 times recent earnings. Analysts expect good earnings growth through 2027.

Mosaic

One of the largest fertilizer producers in the world, Mosaic Co. (MOS), based in Tampa, Fla., has seen its stock advance 44% this year. This surprised a lot of people, since Trump’s 25% tariff on imports from Canada pushed up the price of fertilizers that use potash.

So far, farmers have been willing to pay the increased prices. And Mosaic isn’t totally dependent on the U.S. market. It sells a great deal of fertilizer in Latin America (especially Brazil) and some in China.

The stock also started the year very cheap. Even after this year’s rise, it sells for less than book value (corporate net worth per share).

Carnival

After the pandemic decimated the cruise industry, many people wondered if it would ever come back. Cruise companies’ balance sheets, never super-strong, were strained.

Carnival Corp. (CCL), for example, has debt equity to 286% of stockholders’ equity, and relatively little cash. Yet its stock is up more than 22% this year.

Carnival’s revenue peaked at nearly $21 billion in fiscal 2019 and fell to less than $2 billion in fiscal 2021. But it has bounced back emphatically to nearly $26 billion in the past four quarters.

Boeing

Boeing (BA) has had several safety incidents, most famously a fuselage panel falling off during flight in early 2024. The stock fell 32% that year. You might expect the road to recovery would be a long one. And indeed Boeing is expected to show a loss this year, its seventh annual loss in a row.

Yet Boeing stock is up 25% this year through Sept. 26. Count me among the folks surprised by this. I thought Boeing would have to slow production to deal with the safety issues. For much of this year, I was betting against the stock (via put options, unsuccessfully).

One moral of all these stories is the stock market is often unpredictable. That’s part of what makes it fun. Another moral is the market generally looks forward, rarely back.