Doubtless 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 best 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. The following five companies seem to do best in September:
|
Stock
|
Market Cap
|
Avg. % Return, September
|
Avg. % Return, Rest of Year
|
CAPS Rating
(out of 5)
|
YTD Return
|
|
Sadia (NYSE: SDA)
|
$631.0 million
|
14.57%
|
3.59%
|
*****
|
4.47%
|
|
Discovery Labs (Nasdaq: DSCO)
|
$230.5 million
|
5.55%
|
(1.02%)
|
**
|
(6.05%)
|
|
Vale (NYSE: RIO)
|
$137.7 million
|
18.51%
|
3.02%
|
*****
|
(29.44%)
|
|
ASA (NYSE: ASA)
|
$1.2 billion
|
8.78%
|
0.32%
|
**
|
(31.28%)
|
|
Gold Fields (NYSE: GFI)
|
$188.3 million
|
10.78%
|
(1.23%)
|
***
|
(48.09%)
|
Sources: America Online, Motley Fool CAPS.
What's driven the outsized September performance of gold- and precious metals-based closed-end fund ASA, while the rest of the year is essentially flat? Questions like that are 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. We need to look closer for the reason, but the stock’s two-star CAPS rating suggests that investors think you should dig elsewhere for a play. Still, if September really is their month to school the market, let's see which of the companies above might live up to that promise.
Attention, class!
Surfaxin is one of the more exciting therapies Discovery Labs has in its treatment for respiratory ailments, and it’s currently going through a process for meeting FDA conditions of approval. While Discovery has said it's progressing well, it also announced last week that the drug is being tested as an aerosolized version, which could add an exciting new dimension. CAPS member burtons91 admits there's a lot riding on Surfaxin's approval, but it's a risk that could have a large payoff if and when it's received:
A bit of a gamble in that the company is basically riding on the approval of Surfaxin in he near future. Trading at a $1.84 i feel there are signifigatn gains to be made on the upside especially with the FDA ruling looming in the coming months... CLinical data looks good so we ill have to see.
Another company experiencing potentially game-changing developments is Vale, the world's largest supplier of iron ore. On the heels of both BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RTP) scoring prices 85% higher than those achieved earlier this year, Vale ought to be positioning itself for higher prices as well. Considering that Vale actually produces something of value, CAPS member awallejr feels that the beating its shares have taken make it an excellent value:
Wow, company has tanked hard last few months, basically giving away all its gains. Flirting with 52 week low now. Unlike the dot.com bubble (where nothing was turned into something until people realized it was all really nothing), these companies actually produce real things, things this world will always need. Things that are finite. Great long term entry point for the patient investor.
Gold prices have retraced a lot of their gains in recent weeks, and this past week was no exception. In fact today’s rise in gold prices marks the first time in 10 days there has been a price increase; it was gold’s longest losing streak in eight years. It's still going to be down 6% for the week even with today's jump, and that could explain why gold miners like Gold Fields have seen their shares battered recently. CAPS member ennui feels that inflation is here to stay, and said in June that gold companies will eventually benefit:
Inflation is here to stay. Gold is currently suffering a slump, but that won't last. Now seems a good time to load up on the gold miners.
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 the calendar may display. Since 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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