5 Stocks You May Be Thankful For

You've heard of the "January Effect": 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

Clean Harbors (Nasdaq: CLHB  )

$366.9 million

31.71%

4.09%

****

14.33%

Rangold Resources (Nasdaq: GOLD  )

$918.9 million

11.03%

1.68%

***

(29.27%)

Anglogold Ashanti (NYSE: AU  )

$1.2 billion

8.63%

(2.41%)

****

(66.14%)

Dynamic Materials (Nasdaq: BOOM  )

$510.9 million

66.48%

3.50%

*****

(77.47%)

Allegheny Technologies (NYSE: ATI  )

$318.9 million

12.50%

2.73%

****

(80.52%)

Sources: America Online, Motley Fool CAPS. Data as of Nov. 19, 2008.

With both Anglogold Ashanti and Rangold Resources appearing in the list, you might be tempted to think gold producers are a good bet this month. Yet Barrick Gold (NYSE: ABX  ) , for example, does best in September, so 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. These stocks' three- and four-star CAPS ratings suggest that investors think there's something worth mining here; now it's our turn to investigate the reasons why. If November really is the month they're thankful for, let's see which of the companies above might live up to that promise.

Let's talk turkey
The field of explosion-welded clad materials seems as exciting as it sounds. Dynamic Materials joins two metals together by detonating small explosives, creating a single corrosion-resistant object. The business has also held up surprisingly well, despite the expensive nature of its process and the economy's decline. Cancellations have been immaterial, and bookings remain strong even into the fourth quarter.

CAPS member sawheele worries about supply issues, while maintaining a positive outlook overall: "May have some supply problems according to their last conference call. Expect their strong bottom line to eventually lift this stock."

One would have to imagine that the new administration taking office in January will be a boon for hazardous-waste cleanup specialist Clean Harbors. With Waste Management (NYSE: WMI  ) as one of only national competitors, any tightening of environmental regulations should leave cleanup companies plenty of business to go around. CAPS member Schwaggz notes that the relaxation of environmental laws is a rare occurrence:

... this company is greatly affected by environmental regulations. Remember kids, laws only get stricter. No one will ever pass a law saying lets remove some pollution/enviro regulation, political career suicide. but no matter the economic consequences, it great to have a sound byte saying "i will do more for the environment".

Speaking of clean, Allegheny Technologies produces a steel alloy that ought to improve the efficiency of the country's electrical grid. CAPS member JP1031 wrote early last month that foreign markets are also enjoying the benefits of Allegheny's specialty metals:

Wow, this is a great buy. They have a P/E of 4 with little debt and good margins. I foresee the metal industry growing as the need increases, especially in India, Africa and China. Once trading over $100, at $23 this metals company seems like a steal (pardon the pun).

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?

Dynamic Materials is a Motley Fool Hidden Gems selection. Waste Management is an Income Investor pick. Waste Management is an Inside Value recommendation. Try any of our Foolish newsletter services 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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