JJ Kinahan Walks Us Through The Most Traded Stocks Among TDA Clients In 2016: Apple, Bank of America & More

TD Ameritrade Holding Corp. 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. 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 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. AMZN, AT&T Inc. T, General Electric Company GE and Microsoft Corporation 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 XOM and Chevron Corporation 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 VRX and Gilead Sciences, Inc. 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 GOOG 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 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.”