(Bloomberg) -- Chalk up a win for this year's biggest losers.
So far this earnings season, the worst performing stocks have experienced some of the biggest gains after reporting results, according to Chris Harvey, head of equity strategy at Wells Fargo Securities. In fact, when these companies have topped expectations their shares have gone up 2.1 percent more than the average S&P 500 Index stock that had better than anticipated earnings.
Even companies that continue to struggle are benefiting from the trend, as underperforming shares that miss their targets have done slightly better than the average S&P 500 stock that's fallen short of expectations.
Investors were hoping this earnings season would help lift stock prices, which suffered their first correction in two years. But instead, the market has largely succumbed to any reason to sell.
“The takeaway for these underperforming stocks is bad news (a Miss) is, on average, already priced into the stock and good news (a Beat) is rewarded,” Harvey wrote in a note to clients Wednesday.
To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net.
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Eric J. Weiner, Joanna Ossinger
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