What's working, and what's not, in market

NEW YORK Heading into today the Standard & Poor's 500 stock index was up just 0.6%, but the ho-hum gain masks what's really working (and not working) in the U.S. stock market in 2014.

The winners and losers so far this year might be a surprise to many investors.

Bespoke Investment Group provides a quick analysis of what types of stocks are soaring and which are bombing out. The analysis of the S&P 500, through yesterday's close, breaks down the 500 stocks in the benchmark index into deciles of 10 groups of 50 stocks. (For example, price-to-earnings ratios of stocks ranked from largest to smallest P-Es.)

WINNERS:

1. High P-E stocks. Despite rising angst and a market weighed down by geopolitical risks like the Ukraine crisis, fears of a hard landing in China and talk of a market top in the U.S., the best performance came from stocks with the highest (yes, the highest!) P-E ratios, or those typically deemed more risky.

The 50 stocks with the most pricey P-Es rose 7.24%. In contrast, the decile with the lowest P-Es fell 0.04%.

"Stocks with the worst valuations are doing well this year," says Bespoke co-founder Paul Hickey.

2. Stocks that pay no dividends. Oddly, despite the market turbulence, the decile of stocks in the benchmark stock index that do not pay out any of their earnings to investors in the form of cash dividends posted a solid gain of 6.91%.

3. U.S.-centric stocks. Given all the turbulence this year in global markets, ranging from the early-year emerging market crisis to the more recent geopolitical situation in Ukraine, the 50 stocks in the S&P 500 "that get no revenues outside the U.S." have jumped 3.47%, vs. a gain of just 0.95% for the 50 companies that get the most revenue from abroad.

"This makes sense," says Hickey, "given that all of the worry recently has been about global, non-U.S. issues."

LOSERS:

1. Large-cap stocks. The 50 stocks with the largest market values in the S&P 500 declined 0.8%, and were t! he only one of the 10 deciles in the market-cap category to post a year-to-date loss.

2. Analysts' least-favorite picks. The 50 stocks Wall Street analysts liked the least performed the worst of any of the categories tracked by Bespoke, falling 1.41%.

"So far analysts are on a roll this year," says Hickey.

3. Low P-E stocks. The stocks deemed the least-pricey fared poorly, dipping 0.04%.

The other major trend: the stocks that did the best last year are also topping the performance charts again in 2014. The 50 best-performing stocks in the S&P 500 last year are up 6.85% this year, vs. a gain of just 1.52% for last year's worst-performing decile of stocks.

So there you have it. In a risk-off year, risk-on stocks are leading the way.