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 November. 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 120,000 members have weighed in on some 5,400 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 November:
|
Stock
|
Market Cap
|
Avg. % Return - Nov
|
Avg. % Return - Rest of Year
|
CAPS Rating (out of 5 max)
|
YTD Return
|
|
United Therapeutics (Nasdaq: UTHR)
|
$2 billion
|
20.26%
|
1.27%
|
*****
|
(10.80%)
|
|
First Solar (Nasdaq: FSLR)
|
$13.3 billion
|
49.33%
|
(2.55%)
|
**
|
(43.07%)
|
|
eBay (Nasdaq: EBAY)
|
$20.0 billion
|
5.45%
|
(2.35%)
|
***
|
(55.65%)
|
|
Titanium Metals (NYSE: TIE)
|
$1.9 billion
|
11.33%
|
3.50%
|
*****
|
(63.69%)
|
|
Sirius XM Radio (Nasdaq: SIRI)
|
$826.3 million
|
27.53%
|
(6.22%)
|
**
|
(91.42%)
|
Sources: America Online, Motley Fool CAPS.
What's driven the outsized November performance of biotech United Therapeutics while the rest of the year remains relatively sick? Given that competitor Gilead Sciences (Nasdaq: GILD) does best in February, it's one reason why we don't recommend simply using this as a list of stocks to buy or sell -- just a platform for further research. We need to look closer for the reason, but its five-star CAPS rating suggests investors think it's future looks pretty bright. But if November really is the month they're thankful for, let's see which of the companies above might live up to that promise.
Carve into this
How much will an Obama presidency help the solar industry? Many are betting his position on reducing carbon emissions and oil independence will translate into a trickle down effect for solar. For many investors like CAPS member TepperJason that equates to a boost for First Solar.
[First Solar] is the only solar company that matters.
[First Solar]'s only problem is they still require government funding to keep afloat, but eventually they should be able to make it without government funding.
If Obama wins in November expect a huge run for [First Solar].
[First Solar] is a winner. Ignore the high PE.
While the Motley Fool has established itself via the Internet some companies rely almost entirely on the Web such as eBay and Amazon.com (Nasdaq: AMZN). When eBay decided to rejigger its community, you found CAPS All-Stars like tumachar feeling the e-flea market was doomed.
This company is now doomed. The success has gone to their head. I have been buyer and seller at ebay. I just cannot see where they will make money from.
Here are some of the softcomings I see:
1. For items costing less than $50, the total fees eat up 10% of sale. That is high, unless margins are quite high in the first place. I do not agree that margins are high when selling on ebay. For higher priced items still the total cost may still run upto 7-8%. Thats not easy on sellers, they are going to balk.
2. With the high fees one expects Ebay to assume some risk of sale (like guarantee the payment etc). They do not. All transaction risk is transfered to sellers.
3. New feedback/shipping charges/payment method policies make it even less desirable for sellers.
Now ebay can say they have buyers, sellers will come there. But they need both sellers and buyers to be successful. No company can be successful when it squeezes its vendors out of any profit.
I think this company is going down to zero.
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?
Titanium Metals, eBay, and Amazon.com are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.
Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.
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