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 more than 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 |
---|---|---|---|---|---|
Altria |
$39.4 billion |
7.49% |
(0.34%) |
***** |
(14.55%) |
Transocean |
$23.3 billion |
9.52% |
2.63% |
***** |
(49.00%) |
United States Steel |
$4.1 billion |
15.79% |
2.48% |
*** |
(70.57%) |
MEMC Electronic Materials |
$3.8 billion |
10.66% |
2.02% |
**** |
(80.80%) |
Suntech Power |
$2.4 billion |
24.78% |
1.32% |
***** |
(81.29%) |
Sources: America Online, Motley Fool CAPS.
What's driven the outsized November performance of photovoltaic cells and modules maker Suntech Power while the rest of the year is basically cloudy? Given that competitor SolarFun Power
Carve into this
While critics would say itβs the addictive power of nicotine, investors like the investment story behind Altria because people will smoke regardless of the economic conditions around them, or apparently the price of cigarettes themselves. While I'm perhaps dating myself by saying I can clearly recall when a pack of cigarettes and a gallon of gas both cost $0.60 each (circa 1975), nowadays I'm able to buy a tank of gas for what it costs to buy a carton.
CAPS member newstockinvestor not only likes the recession-resistant nature of Altria, but that it also pays a healthy dividend yielding 6.6% annually:
Tobacco is a recession-proof industry. People smoke and will continue to do so. I don't, but with a nice dividend I'll be holding on for a while.
Add in that Altria trades at a significant discount to either Lorillard or Reynolds American
The consensus on CAPS is that MEMC Electronic Materials is arguably one of the best-run semiconductor businesses with a long track record of success, thanks in part to a superior management team. However, today's news that CEO Nabeel Gareeb has resigned will undoubtedly introduce some uncertainty. CAPS member Scotbgaw suggested last week that it's still an underpriced stock by any measure:
One of the finest, best run semiconductor businesses on the market selling for 6 times trailing earnings, 5 times trailing cash flow. Industry PE is still 15, and while other businesses have been projecting decreasing earnings, [MEMC Electronic Materials] projects growth. This is an opportunity to own a great company.... PEG of 0.3 is a good valuation sign.
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?