5 Stocks With Hot June Returns

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 that perform better than others, simply because of the nature of the business. Some stocks even do better in June

Whatever the reason, investing based solely on the calendar is certainly not a Foolish strategy. Backtesting and data-mining can turn up nearly any causal relationship we want, if we search hard enough. Still, wouldn't it be great to know ahead of time which stocks performed best at what times?

On Motley Fool CAPS, more than 105,000 investors have weighed in on more than 5,600 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 excel in June:

Sources: America Online, Motley Fool CAPS.

What's driven the relative better June performance of on-again, off-again No. 1 car seller General Motors, even though it tends to be a bit flat for the rest of its year? Is it that more people are getting ready for summer driving, or is it an anomaly? Rival Ford (NYSE:F) tends to do better in April -- one example why we recommend using this only as a platform for further research, not a list of stocks to blindly buy or sell. Whatever the reason, the one-star CAPS rating suggests that investors still expect the wheels to come off this investment.

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 June really is their month to shine, let's see which of the companies above might live up to that promise.

Big Brother is watching
While Alvarion's deal to have its BreezeMax platform stream video for traffic-control purposes in the U.K. is a win for the WiMAX equipment leader, it should also help improve traffic flow and security, by allowing traffic officials to manually change lights when needed. The stated purpose of helping traffic flow through the later addition of license-plate-recognition systems seems a bit of a stretch, though the transmission of real-time travel information ought to be a boon to commuters.

Investors have been signaling their pleasure with Alvarion, a Motley Fool Rule Breakers recommendation. CAPS player oeustice notes that the biggest boost for WiMAX has been coming from overseas:

WiMax as a technology has a proven track record and is supported by players like Google and big names in the US cellular market. Of course, the first big boost came from overseas. The contract to modernize the UK's MetraNet is the perfect stepping stone for both WiMax as a technology and this company specifically.

RANDBACH thinks the real growth opportunity is here in the U.S. Though some telecom carriers like Verizon (NYSE:VZ) may be opting for a competing fourth-generation wireless technology, Alvarion and WiMAX should still profit handsomely:

Between WIMAX and 3G [innovations], WIMAX is ready for complete deployment. It has the largest number of WIMAX deployments around the world to include Asia. Alvarion also has certain patents on technology that should [benefit] from licensing around the world. The USA is the key to a quantum growth leap and this maybe a doubler by fall 2009.

A calming effect
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 you can sign up and express your investing opinions absolutely free, why not use this opportunity to take your star turn?