The stock market rebounded from its worst first half in 52 years with its best month since November 2020, when the S&P 500 index gained 9.1% in July, reducing losses to 13.3% to 13.3%.
Stocks this week shrugged off news that GDP is contracting for the second consecutive quarter, a common indicator of an impending recession and another 75 basis point rate hike by the Federal Reserve on Wednesday. The S&P 500 gained just 5.3% in the last three trading days of the month. Some experts believe that fears of a recession have already been priced in, and that Q2 results in recent weeks have generally outperformed the low expectations investors had been anticipating.
The best performing stock in the S&P 500 was Enphase energy (ENPH), a solar technology company that rose 46%, especially in the last three days after it reported its second-quarter results. Revenue for the quarter grew 68% year over year to $530 million, and net profit nearly doubled to $77 million. The biggest loser in the S&P 500 was the Colorado-based gold mine Newmont Corp. (NEM)which fell 24% and fell short of earnings expectations on Monday.
Growth stocks, one of the hardest hit this year, are among the month’s winners. Cryptocurrency Exchange Coinbase (COIN) and electric car manufacturer Rivian (RIVN) both gained more than 30% in July. They are now down 75% and 67% respectively for 2022.
July’s biggest winner was Israeli fintech Pagaya Technologies (PGY), which gained 494% after becoming the latest meme stock of the month for a short squeeze fueled by social media. Pagaya, which uses artificial intelligence for credit approvals, went public in June in a SPAC merger and lost more than 70% in its first few weeks until it rose 819% since July 19 after a filing statement filed with the SEC revealed that it a float of only 945,000 shares of the 654 million shares outstanding. Pagaya posted sales of $475 million on a net loss of $209 million in 2021 and now has a market cap of $12 billion.
In the mid-cap range, including stocks between $2 billion and $10 billion in market cap, Chinese software vendor WeTrade Group (WETG) led the way and tripled in July. The main catalyst was an announcement on July 18 that it was listed on the Nasdaq, offering 10 million shares at $4 a share. Shares closed the month at $17.32.
Mid-sized companies with crypto exposure also performed well, as bitcoin gained nearly 20% in July after dropping 60% and losing $530 billion in market value in the first half of 2022. Microstrategy (MSTR)a software company that owns about $3 billion in bitcoin, and cryptobank Silvergate Capital (SI) both increased by 74%.
No midcap business fell more than 30% in July, but the worst performer was MSP Recovery (MSPR), an 84% drop since it went public in May via a SPAC merger. The company, which aims to take advantage of lawsuits surrounding Medicare and Medicaid insurance claims, generated just $14.6 million in revenue in 2021, causing investors to roll their eyes at the implied valuation of $32.6 billion at the IPO.
These are the 10 US publicly traded midcap companies that performed best and worst in July, according to data from Factset.
Of the small-cap stocks with market values between $300 million and $2 billion, few have fallen further than Bausch Health (BHC), which crashed by 41% on a Thursday after a U.S. district court judge ruled it will invalidate some of its patents related to its Xifaxan drug to treat irritable bowel syndrome. Competitor Norwich Pharmaceuticals is proposing a generic version of the drug, which delivered $1.6 billion in sales to Bausch Health in 2021, 19% of its sales.
Bausch Health is a Canadian drug developer who was worth a staggering $90 billion at its peak in August 2015, when it was known as Valeant Pharmaceuticals, but fell victim to $30 billion in debt after a slew of acquisitions and public backlash against its practices. of buying drugs and raising their prices exponentially. It plunged more than 90% in a span of less than a year, costing hedge funds like Bill Ackman’s Pershing Square billions. It changed its name in 2018 to distance itself from that history, but the stock has continued to slide. It is down another 83% this year to $4.62 a share, the lowest level since 1995.
Most small caps fared much better in July, with the Russell 2000 index rising 10.4% and ten companies doubling in value. Bitcoin miner Marathon Digital (MARA) rose 143% after closing a deal to increase power supply, and Rhythm Medicines (RYTM) tripled thanks to promising data for an obesity drug.
These are the 10 biggest US-listed small-cap winners and losers of the month, according to data from Factset.