The March Mayhem Effect

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.

For more than a year 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 March. 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 March:

Sources: America Online, Motley Fool CAPS.

What's made solar stock JA Solar shine brightly in March while the rest of the year is cloudy? Considering that Suntech Power (NYSE:STP) does better in December underscores 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 JA Solar's four-star CAPS ratings suggests investors think the future's still bright so you gotta wear shades. Yet if these companies have really resolved to do better in March, let's take a look at some of those above that might live up to that promise.

Absorbing like a sponge
The lack of credit and the inability to finance new projects was what caused me to think there was a bad moon rising over solar energy stocks last October. I feared that it would become a cloud that would hide the luster offered by the investment tax credits for alternative energy recently passed and now it seems those storm clouds are pouring forth their contents on JA Solar.

The Chinese solar-cell manufacturer reported that as a result of tight credit markets and a lack of available financing, not only was it going to have to cut back on its revenue projections for the year, but it was also finding it necessary to cut its total production outlook as well. That's a forecast bolstered by First Solar (NASDAQ:FSLR), which offered up an otherwise bright earnings report but still said the near-term conditions for the industry "never looked more difficult." Go further out, say three to five years, and trends are far more favorable, but right now with energy costs low, a full-bore recession gripping the economy, and a global financial situation still up in the air, it becomes difficult to see any shelter in sight.

But it's the hope for a sunnier day in the future that has CAPS member SIP08ISU figuring JA Solar will be a market burner in due time.

Although this company has had to cut its projected 2009 earnings which has in turn lowered the share value this stock will outperform the market in years to come. Solar energy is becoming more and more important which is going to place an emphasis on companies such as this one. Looking at the 52 week range the shares are near the bottom and I believe in the long run there is nowhere else to go.

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?