Investors went on the defensive in the second quarter as economic uncertainty unsettled markets, Jakir Hossain, an associate markets data journalist at Morningstar.com, wrote in a blog post on Thursday.
Consumer and health care stocks racked up big gains, while software companies and retailers absorbed large losses as rising interest rates and recession fears tempered expectations for demand.
Hossain noted that only 110 of the 865 U.S.-listed stocks covered by Morningstar analysts made gains in the second quarter, down from the 313 that did so in the January-to-March period.
The second-quarter debacle resulted in widespread changes in Morningstar Star Ratings, according to Hossain. Ratings from 1 star to 5 stars are based mainly on valuations. Stocks with a 1-star rating are the most expensive, and those with 5 stars are considered undervalued.
In all, 485 stocks in the second quarter experienced a rating change by 1 star or more, compared with the start of the quarter; for the prior 12 months, the quarterly average was 151 changes. Of those stocks whose star rating changed, 241 fell into undervalued territory, while only 26 became overvalued.
See the gallery for the 10 stocks that performed best in the second quarter.