TD Ameritrade Holding Corp. (NASDAQ: AMTD) recently issued a brief report going over some of the biggest
trends in the stock market in 2016. For Benzinga readers to better understand the data, we reached out to the firm’s chief market
strategist, JJ Kinahan, who walked us through some of the year’s most widely
held, sold and bought stocks, as well as big trading events and generational trades.
The Apple Story
Apple Inc. (NASDAQ: AAPL) remained the
most widely held and traded stock among TDA clients, Kinahan began. However, as 2016’s IMX reports showed, there were months where
Apple was net sold, something the firm had not seen much in the past.
“I think part of the selling had to do with the fact that they rallied pretty well at the end of the year, and I think that the
other big thing is what’s new, so to speak,” the expert explained. It’s the old 'what have you done for me lately?' And, if you
think about Apple products, what is there that people can get really excited about last year? A new version of a phone, new
headphones? You think about where Apple was a few years ago— They released products that you could really rally around and get
excited, particularly between Halloween and the holidays. You’re just not seeing that level of engagement and excitement. People
aren’t waiting overnight to get headphones.”
Having said this, Kinahan added, Apple remains the most widely-held stock among TDA clients. “So, there is something there,” he
pointed out. “People still want to own it; I just think that the excitement level of Apple— the bloom is off the rose, if you will,
a little bit.”
Other Highly Traded And Held Stocks
Another interesting new trend was the rotation of stocks, with Facebook Inc (NASDAQ: FB) becoming the second-most held and bought stock of the year. “Just like Apple was
always viewed as the amazing innovator (people used their products and really understood them) I think Facebook is having the same
thing happen,” the strategist commented. “People see them as an innovator; they understand the amount of information they sit on;
they know how the product works; they know how Facebook makes money. So, the model is really clean for the average person.”
Completing the list of most held stocks among TDA clients were Amazon.com, Inc. (NASDAQ: AMZN), AT&T Inc. (NYSE: T), General Electric Company (NYSE: GE) and Microsoft Corporation (NASDAQ: MSFT).
“AT&T is driven in a big sense by the fact that they pay an attractive dividend,” Kinahan explicated. “It will be
interesting to see, as we head into 2017, if that starts to rotate out as we have more expected rate increases this year.”
Also popular in 2016, although not in the top five, was the energy sector. “With Exxon Mobil Corporation (NYSE:
XOM) and Chevron Corporation (NYSE: CVX), we saw our clients buy those early in the year and then start to
sell them later in the year as the interest rate hike finally became something of a reality.”
Finally, Kinahan noted, “It’s interesting that Valeant Pharmaceuticals Intl Inc (NYSE: VRX) and Gilead Sciences, Inc. (NASDAQ: GILD) were in the top five, because they were more news driven stocks [...] I think that was people trying to take opportunistic trades when those
stocks dipped— It’ll be interesting to see if they can last a little bit longer. On the other hand, I do feel like Alphabet
Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), because of their business model, etc., is one that can last for a long
time.”
Moving on to the sell side, what Kinahan believes is interesting is the appearance of Bank of America Corp
(NYSE: BAC). “A lot of that was driven at the end of the year
because people had held Bank of America and as it started to make these new highs… So, people were like, ‘OK, I’m happy to sell it
and go on,’” he explicated. “One thing about Bank of America is you’ll see, when it’s bought and sold, many people will use Bank of
America as sort of a derivative for the financial industry. So, a lot of people held Bank of America early in the year and it is
still in our top 10 of most held stocks.”
“Bank of America and Apple, I think you can draw some comparisons to and the fact that it’s a stock being sold,” he concluded.
“I think it’s being sold for a little bit different reasons, but it’s still a widely-held stock and to me. When I see something
like that, I’m actually kind of happy because it also means that people are selling things as they go up and taking some profits,
not saying I have to get the absolute top pick.”
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