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. Some stocks actually do best in January, despite the window dressing going on. 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, and when?

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 January:


Market Cap

Avg. % Return - Jan

Avg. % Return - Rest of Year

CAPS Rating (out of 5 max)

LTM Return

CompuCredit (NASDAQ:CCRT)

$271.7 million





General Maritime (NYSE:GMR)

$319.5 million






$148.6 million





Altair Nanotechnologies (NASDAQ:ALTI)

$103.4 million





Affymetrix (NASDAQ:AFFX)

$248.5 million





Sources: America Online, Motley Fool CAPS.

What's made biochip maker Affymetrix a better performer in January compared to the rest of the year? Considering that rival Genzyme (NASDAQ:GENZ) does better in July, we don't advise using these stocks as a buy or sell list -- just a platform for further research. Though the real reason demands our closer scrutiny, Affymetrix's three-star CAPS ratings does suggest that investors think there's still a spark of life left in these shares. If these companies have really resolved to do better in January, let's see which might live up to that promise.

Ulcer-inducing results
Although Pozen seemingly reached its goal of reducing the number of "endoscopically confirmed gastric ulcers," the FDA said it wasn't convinced that the results were clinically relevant. Pozen's painkiller, PN400, is being developed in conjunction with AstraZeneca (NYSE:AZN), but itmust await the FDA's decision -- due sometime this quarter -- before filing its marketing application with the agency.

Though Pozen's stock took a hit after releasing its results last month, CAPS member philsie2 thinks that the discount the market is offering makes now an excellent time to buy in -- if you think the FDA will come through:

If FDA accepts the gastric ulcer endpoint for PN400 and the PA program then we'll see a very strong move back to the $12-15. Add to that a very good acceptance, so far, of Treximet there are a lots of positives in the making. Excellent time to take advantage of a good entry; though right now that's true of just about anything.

Gimme credit
Top-rated CAPS All-Star brightsideLP thinks things will only get worse for subprime credit specialist CompuCredit if the financial crisis continues unabated. Considering it issues its own branded credit cards to customers with less-than-stellar credit scores, the company's outlook could get darker if credit cards become the next domino to fall, as some anticipate:

If credit woes accelerate this stock will be pennies in a hurry. They address the low end of the income totem pole - and those hurt worst by our current and future economic troubles. If everything gets rosey and turns on a dime - then this stock could recover in a hurry. However, the risks are stacked up high - and this will be the target of short vultures that relentlessly smash down share prices

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?

On Jan. 12, 2009, Fool co-founder David Gardner, Jeff Fischer, and their Motley Fool Pro team will accept new subscribers to their real-money portfolio service. Motley Fool Pro is investing $1 million of the Fool’s own money in long and short positions in a range of securities, including common stocks, put and call options, and exchange-traded funds (ETFs). They also incorporate proprietary CAPS "community intelligence" data into their research. To learn more about Motley Fool Pro, and to receive a private invitation to join, simply enter your email address in the box below.

Affymetrix is a Motley Fool Rule Breakers recommendation. CompuCredit is a Stock Advisor selection.

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.