You've probably heard of the "January Effect," the phenomenon that seemingly causes stocks, particularly small caps, to surge in the first month of the year. In theory, investors and institutions sell securities in December for tax-harvesting reasons, then buy them back the following month, causing them to jump in price.
Yet what about other months? Retailers, for example, have some seasons in which they perform better, simply because of the nature of the business. Some stocks do better in April.
Whatever the reason, investing based solely on the calendar is certainly not a Foolish strategy. Back-testing and data-mining can turn up nearly any causal relationship we want. Still, wouldn't it be great to know ahead of time which stocks performed best at what times?
On Motley Fool CAPS, more than 95,000 investors 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. The following five companies seem to do best in April:
|
Stock |
Market Cap |
Avg. % Return-April |
Avg. % Return-Rest of Year |
CAPS Rating |
Return (YTD) |
|---|---|---|---|---|---|
|
Synchronoss Technologies |
$671.47 million |
28.97% |
1.44% |
**** |
(42.10%) |
|
Taseko Mines |
$806.43 million |
22.11% |
4.69% |
***** |
10.81% |
|
LCA-Vision |
$239.00 million |
9.62% |
(0.27%) |
**** |
(35.25%) |
|
Value Line |
$440.69 Million |
8.27% |
(0.44%) |
***** |
8.42% |
|
Merck |
$90.60 billion |
6.31% |
(0.52%) |
**** |
(28.58%) |
What has driven the stellar April performance of pharmaceutical giant Merck, even as much of the rest of its year tends to be lackluster? Certainly March wasn't kind to the pharma, or its partner Schering-Plough
Except for a few days here and there, thanks to the Fed, the year has been off to an ugly start for many stocks, but if April really is their month to shine, let's see which of the companies above might live up to that promise.
Dialing up trouble
Stories that Apple
So why would a shortage be positive for Synchronoss, since some analysts project that being out of stock could cost Apple some 40,000 phones a week? Well, it could herald the introduction of a new version of the phone that runs on the new 3G wireless networks. While it's been speculated that Apple might introduce such a phone in the third quarter of the year, the reports of a shortage are adding to the anticipation that it may be moving up a launch date to June or July. That could ramp up further business for Synchronoss.
Investors on CAPS feel the order-processor can continue milking the iPhone cash cow while also expanding overseas. Some 96% of the CAPS investors who've rated the stock see Synchronoss as outperforming the market. Some, like top-rated All-Star yippiekiyeh, feel it will "ride the iPhone wave to riches." As he noted last June at the debut of the revolutionary iPhone, the company has a lot of potential to grow.
A little more than a year ago, the NetScribe analysts and market researchers found Sychronoss' ConvergenceNow platform as the path for that growth:
Very recently, the company has released a new software platform, ConvergenceNow that accelerates the order to cash process for complex service bundles including voice, video, wireless, high speed Internet access and content. ConvergenceNow addresses the recent network and architecture upgrades including IP Multimedia Subsystems (IMS) that CSP's are using to deliver bundled solutions, and enables an environment with a single point of access to numerous agnostic communication and entertainment. Thus the shares of Synchronoss Technologies offer good opportunity for long-term investors.
A calming effect
But we haven't yet heard from you, and at Motley Fool CAPS, every investor's opinion counts. 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?
