The table below lists the most and least popular stocks part of S&P 500 index during 2015. The most popular companies during the first three quarters of 2015 have been Netflix, Transocean, First Solar and Wynn Resort. The least popular have been Philip Morris, Johnson & Johnson, Wells Fargo and Procter & Gamble.
The popularity is measured using share turnover that is calculated by dividing the average number of shares traded by the average amount of outstanding shares. The turnover represent the fraction of a company that changes owners during a quarter. The more new owners, the more popular the stock has been. The ratio makes it possible to easily compare the popularity of corporations of different sizes that is not visible by just using the trade volume.
Most Popular S&P 500 Stocks: 2015 Q1 - Q3
|Ticker||Company Name||2015 Q1||2015 Q2||2015 Q3|
|FSLR||First Solar Inc||4.35%||2.62%||2.95%|
|WYNN||Wynn Resorts Ltd.||2.61%||3.04%||3.95%|
|AAL||Alexander & Alexander||3.10%||2.72%||2.38%|
|URI||United Rentals, Inc.||2.64%||2.23%||2.86%|
|MO||Altria Group Inc.||0.37%||0.33%||0.36%|
|KO||The Coca Cola Co.||0.36%||0.29%||0.35%|
|XOM||Exxon Mobil Corp.||0.37%||0.26%||0.37%|
|PG||Procter & Gamble||0.32%||0.28%||0.37%|
|JNJ||Johnson & Johnson||0.33%||0.27%||0.31%|
|PM||Philip Morris Int'l||0.36%||0.30%||0.26%|
Share turnover = Average daily trading volume during a quarter / (Average number of common shares outstanding during a quarter – Number of restricted stocks not available for general investors)
Purchase full historical quarterly and annual share turnover data of all current S&P 500 companies and make your own analysis. Download a sample file from here.
Using share turnover as a measure of stock popularity started to gain a lot of attention when Roger G. Ibbotson and Thomas M. Idzorek published their paper Dimensions of Popularity in the Journal of Portfolio Management at the end of 2014. Based on their research, the authors proposed the most popular stocks underperform in the long run. On average, the best returns are received from companies with low share turnover.
Based on this paper, the Economist magazine proposed that the popular shares will often become victims of the momentum effect: the temporal popularity drives up the price on short term (matter of months). But the long term earnings rarely meet the unreasonable expectations loaded on the company and the price will soon start to plunge.
Many speculative investors jump in when the bubble is about to reach its peak and normally generate the biggest losses for themselves. It is wise the very of companies too often in the news, firms with extremely hot product or stocks that are recommended by too many analyst.