The February Forecast

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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.

All year long we've been looking at stocks that also do better in other months. Retailers, for example, have some seasons that perform better than others, simply because of the nature of the business. And some stocks actually do best in February. 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 125,000 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 February:

Stock	Market Cap	Avg. % Return February	Avg. % Return Rest of Year	CAPS Rating (5 stars max.)	LTM Return
Rostelecom (NYSE: ROS)	$5.9 billion	15.77%	1.83%	*	(26.11%)
Cliffs Natural Resources (NYSE: CLF)	$2.7 billion	10.96%	3.44%	****	(59.75%)
Valero Energy (NYSE: VLO)	$11.4 billion	8.05%	1.17%	*****	(61.28%)
Titanium Metals (NYSE: TIE)	$1.3 billion	19.26%	2.71%	*****	(66.53%)
Jones Lang LaSalle (NYSE: JLL)	$827.4 million	9.79%	(0.05%)	*****	(67.57%)

Sources: America Online, Motley Fool CAPS.

What's made Russian telecom provider Rostelecom dial up a hot February while the rest of the year can't get a dial tone? While not a completely analogous company, AT&T (NYSE: T) does better in December, underscoring why we don't recommend simply using this as a list of stocks to buy or sell. Consider it just a platform for further research. We may need to look closer for a reason, but Rostelecom's one-star CAPS ratings suggests that investors think they should just hang up on it. Yet, if these companies have really resolved to do better in February, let's take a look at some of those above that might live up to that promise.

Absorbing like a sponge
It hardly needs expanding upon to say that the commercial real estate market is going through a rough period. Perhaps it's not equal to that of the residential market, but then again, there was some significant lag time before commercial lines started their decline. Either it's a sign that the sector is a more stable and secure one so that its recent rumblings will be short-lived, or it means that there is a whole lot more pain to come.

I'd opt for the latter. The tab is coming due for commercial mortgage-backed securities (CMBS) starting next year as the debt provided over the last handful of years gets refinanced. According to the Mortgage Bankers Association, the $171 billion of commercial mortgages held by non-bank investors due this year is facing a tapped-out credit landscape. Issuance of CMBS in 2008 fell 95%.

In any case, 2009 is not going to be the year we see a turnaround. That provides an opportunity for integrated real estate and property management services provider Jones Lang Lasalle to peddle its services to help lenders and property owners work out pre-foreclosure settlements. Thus far, lenders have exhibited some reluctance to move on properties when the cash flow situation is still intact. While foreclosures ticked up in 2008 and may accelerate in 2009, Jones Lang Lasalle thinks its services in helping clients evaluate the distressed assets market will continue to be needed.

Following the acquisition of The Staubach Co., Jones Lang Lasalle became the second-largest real estate firm, behind only CB Richard Ellis Group (NYSE: CBG), and perhaps a dream stock for investors. CAPS member whitepapers believed as far back as December that JLL was a premier company that would take a while to digest Staubach, but would continue producing strong cash flows of its own:

Times are tough and they're trying to digest a big bite in The Staubach Company purchase. Anything real estate related is being trounced lately. Add in the fact that their dividend was cut - which I personally think was a smart idead - you can see why the stock price is down so far. This is a premier company with positive cash flow and a reasonable amount of debt.

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?