Top Three Stocks on the S&P 500 in November: Expedia, Paramount and Carnival

Last month was one of the best Novembers in the past 60 years as the S&P 500 returned 8.9%. Only 2020 (10.8%), 1980 (10.2%) and 1962 (10.3%) were better. In fact, if you go back to 1928, only two other Novembers were better than this year: 1933 (10%) and 1928 (12%).

The Nasdaq Composite did even better last month, returning 10.7%, while the Dow Jones Industrial Average posted an 8.8% return in November.

Going back to the S&P 500, the 8.9% return wiped out the 8.6% drop that the benchmark had experienced over the previous three months. At 4,594 on Dec. 1, the S&P 500 was at its highest level since January 2022. Thus, it was clearly a good month for most stocks, but here are the top three performers from last month.

1. Expedia, up 49.4%

Expedia Group (NASDAQ:EXPE), the travel-booking site, had a blowout month, with its stock price surging 49.6% in November. It is currently trading at just under $138 per share, up 57% year to date. The stock launched right after the company released record revenue and earnings for the third quarter.

Expedia’s revenue came in at $3.9 billion, up 9% year over year, while its gross bookings rose 7% to $25.7 billion. Lodging gross bookings set a third-quarter record at $18.5 billion, up 8% year over year. While Expedia’s net income was down 12% to $425 million, its adjusted net income hit a record $778 million.

“Our strong third-quarter results with record revenue and profitability came in ahead of our guidance and reflect the resilience of travel demand and continued improvements stemming from the execution of our strategy,” Vice Chair and CEO Peter Kern said.

Looking ahead, Expedia expects gross bookings in the fourth quarter to be in line with Q3, while revenue is projected to be up by double digits for the full fiscal year. The company also announced a $5 billion share-buyback program. Following the earnings release, Expedia received a slew of analyst upgrades and saw its price targets raised, which had the effect of driving its stock price even higher.

“It is clear our transformation strategy and growth initiatives are playing out, and we anticipate this momentum to continue into the fourth quarter,” Chief Financial Officer Julie Whalen said on the Q3 earnings call.

2. Paramount Global, up 46.1%

Paramount Global (NASDAQ:PARA) started and ended November with a bang. The stock surged 28% the week after the company announced its third-quarter results on Nov. 2, reporting a 3% year-over-year jump in revenue and a 27% increase in net earnings to $295 million.

Paramount received an unexpected boost from its direct-to-consumer (DTC) streaming business, which saw its revenue surge 38%. Subscription-based Paramount+ led the way, with revenue up 61% year over year. Losses in the DTC business were less than they were a year ago, and the business has performed better than expected.

Paramount also saw a 14% revenue boost from its films division due to the success of Mission: Impossible – Dead Reckoning Part One and Teenage Mutant Ninja Turtles: Mutant Mayhem.

Paramount Global ended the month with an 11% jump in price in the last week of November. One of the catalysts may have been a Securities and Exchange Commission (SEC) filing that basically protects executives’ severance if there is a change in control of the company. This fueled speculation about a potential merger or acquisition.

The other catalyst was the reported sale of its $500 million Bellator mixed martial arts business to the Professional Fighters League. It followed news in October that Paramount was closing down Showtime Sports. The company has been saddled with high expenses and lots of debt, so investors welcomed these moves.

Paramount is still down 8% YTD, trading at just over $15 per share.

3. Carnival Corp., up 39.5%

It was certainly a good month for the travel sector as the cruise line Carnival Corp. (NYSE:CCL) notched the third-best return in November, up 39.5%. Carnival did not report earnings in November, but it has been benefiting all year from a surge in bookings. A lot of it has to do with pent-up demand from the pandemic, but cruise lines in general are getting a boost due to the discount they offer to land-based vacations.

“We’re now significantly ahead of [the] same time last year by about 10 points and well ahead of where we were in 2019,” CEO Josh Weinstein said on the Q3 earnings call. “In fact, we already have less inventory remaining for sale… [compared to] the same time last year, despite 5% more capacity and sailing with occupancy at historical levels, and importantly, we’ve been able to achieve this 10-point occupancy advantage at higher ticket prices for the same time last year.”

It also helped that Carnival saw record Black Friday bookings for its Princess Cruises, Holland America, and Cunard cruise lines, so things do not appear to be slowing down anytime soon.

Carnival is up 105% YTD, trading at just under $16 per share.

All three stocks are reasonably valued, if not cheap, even with the big moves. All three are worth a look, with Expedia and Carnival looking like the better options.