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Allergan Hurt the Performance of XLV’s Top Ten

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Aug. 18 2020, Updated 5:25 a.m. ET

XLV’s top ten stocks underperformed bottom ten stocks

Within the Health Care Select Sector SPDR ETF (XLV), the top ten stocks by weight underperformed the bottom ten stocks. The top ten stocks, which consist of stocks like Johnson & Johnson (JNJ), Pfizer (PFE), and Gilead Sciences (GILD), gave an average return of 0.44% on October 5, 2015. The combined weight of the top ten stocks stood at 54.06% of XLV’s portfolio.

XLV’s bottom ten stocks include Patterson Companies (PDCO), Tenet Healthcare (THC), and Quest Diagnostics (DGX). The bottom ten gave an average return of 0.72% for the same period. The combined weight of the bottom ten stocks stood at 3% of XLV’s portfolio.

The above graph reflects the performance of the top and bottom ten stocks of XLV in comparison with XLV and the SPDR S&P 500 ETF (SPY) on October 5. SPY outperformed the others with a return of 1.78%.

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Allergan hurts the performance of XLV’s top ten stocks

Allergan (AGN) fell by 3.27% on profit booking and gave up its three-day upward movement. The stock closed at $278.58 and was trading below its 20-day, 50-day, and 100-day moving averages. The stock was on an upward trend on September 30, 2015, as the company completed the acquisition of Kythera on October 1. AGN acquired Kythera in an all-cash transaction valued at ~$2.1 billion.

Also on October 2, Allergan announced that it is partnering with Humana (HUM) to explore new ideas and ways to improve the health and well-being of patients, members, and their caregivers. As per the press release, “The main objective of the Allergan and Humana collaboration is to study key issues and obtain a more comprehensive understanding of opportunities for improvement in care delivery.” AGN has a weight of 4.65% in XLV’s portfolio.

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