You've heard of the "January Effect," where investors sell stocks in December for tax reasons, only to buy them back in January, causing their price to jump.
Yet what about other months? Retailers, for example, have some seasons that perform better than others, simply because of the nature of the business. Some stocks even do better in September. Whatever the reason, investing based solely on the calendar is certainly not a Foolish strategy.
Still, wouldn't it be great to know ahead of time which stocks performed best at what times?
On Motley Fool CAPS, more than 115,000 members have weighed in on more than 5,500 stocks, awarding five-star ratings to the companies that most command their confidence. We've paired their opinions with data going as far back as five years to see which stocks perform best in each month. These five companies seem to do best in September:
|
Stock
|
Market Cap
|
Avg. % Return-Sept.
|
Avg. % Return-Rest of Year
|
CAPS Rating (out of 5 max)
|
YTD Return
|
|
Yingli Green Energy (NYSE: YGE )
|
$2.2 billion
|
62.43%
|
(0.69%)
|
*****
|
(55.99%)
|
|
Melco Crown Entertainment (Nasdaq: MPEL )
|
$2.8 billion
|
26.63%
|
(7.78%)
|
*****
|
(45.07%)
|
|
Qiao Xing Universal Telephone (Nasdaq: XING )
|
$130.3 million
|
15.24%
|
(1.29%)
|
****
|
(48.97%)
|
|
USANA Health Sciences (Nasdaq: USNA )
|
$600.6 million
|
12.14%
|
1.09%
|
*
|
(0.65%)
|
|
Motorola (NYSE: MOT )
|
$21.8 billion
|
8.00%
|
(0.32%)
|
**
|
(39.51%)
|
Sources: America Online, Motley Fool CAPS.
What's driven the September performance of Motorola while the rest of the year is essentially a bust? We need to look closer for the reason, but its two-star CAPS rating suggests investors are less than impressed with Motorola's performance regardless of the month. It's one reason why we don't recommend using this as simply a list of stocks to buy or sell -- just a platform for further research. But if September really is their month to school the market, let's see why.
Attention, class!
Following the sell-off in solar stocks earlier this year, investors are now able to find these companies at far more attractive multiples. Yingli Green Energy sells at just 7.7 times next year's expected earnings, and analysts anticipate 36% growth, giving it a measly 0.2 PEG ratio. While there are a number of companies with richer valuations -- First Solar (Nasdaq: FSLR ) trades at 40 times next year's earnings -- these are multiples that are well below the stratospheric numbers from the end of last year.
CAPS member darkstar13 thinks the supply contracts and deals Yingli has put in place should give it the chance to shine.
[Yingli] has about 1/3 of their Polysilicon supply for the current year locked in through a purchase agreement. There has also been several decent contract announcements with European industries and governments. I believe they have an advantage in being a Chinese company in that their labor costs will remain lower than their competitors in the long run, which will allow them to win more contracts and grow faster than their competitors.
Gaming and casino operator Melco Crown Entertainment already has a well-developed presence in Macau -- where gaming revenue grew 45% last year and is expected to grow about 30% this year. It has more projects coming online over the next few years and no exposure to the U.S. economy, unlike MGM Mirage (NYSE: MGM ) . For investors like CAPS member TMFRedwood, Melco looks like a winning bet.
[Melco] operates the highest volume casino property in Macau. Unlike many of its peers, it does not have a large debt balance, which reduces risk. The shares have been unfairly pummeled due to concerns over slowing growth in Macau... [T]here is some risk as Macau is a new market.
There's no question USANA Health Sciences remains a lightning rod, but the company is in a new phase now: It has settled a lawsuit with one of its biggest detractors, and company founder Myron Wentz has given up the CEO position so his son can run the company. The stock has risen steadily from its lows, confounding the naysayers and affirming the faith in it from believers like CAPS member capitalgorilla.
very sound products I have tried myself and well priced. [Company] seems solid with high insider ownership and I know company business model too well to believe the already refuted [rumors] about accounting/stockoption enrichment issues.
At EPS of $2.3 $33 is pretty cheap given how unjustified the revenue and stock drop were. Baby boomers aging will need lots of good nutritional supplements as they age and the AMA continues suggesting we take our vitamins and more health benefits are discovered alongside the weakness of our regular food.
A calming effect
It pays to start your own research on these stocks on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. Your voice affects these stocks, whatever month it is. Because it's free to sign up and express your investing opinions, why not use this opportunity to take your star turn?
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