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 prices to jump.

Is there a similar phenomenon at work in October? Investing based solely on the calendar is certainly not a Foolish strategy, but 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 October:


Market Cap

Avg. % Return-Oct.

Avg. % Return-Rest of Year

CAPS Rating
(5 max)

Return (YTD)

Southwestern Energy (NYSE:SWN)

$9.6 billion





Perini (NYSE:PCR)

$424 million





Indevus Pharmaceuticals (NASDAQ:IDEV)

$172 million





Harmon International (NYSE:HAR)

$1.0 billion





Silver Wheaton (NYSE:SLW)

$766 million





Sources: America Online, Motley Fool CAPS.

What's driven the outsized October performances of audio products maker Harmon International, while the rest of the year basically gives it static? We'd need to look closer for the reason, so don't use this list as buy or sell recommendations. But Harmon's three-star CAPS rating suggests investors think it may have a chance to dial in for success.

If October really is the month that these companies scare up growth, let's see which might live up to that promise.

Even with the slide in gold prices over the past few days, silver retains an extremely undervalued ratio to the historical averages of its yellow cousin. Where it has typically traded around 1/20th of the price of gold, silver is currently 1/75th, meaning the deal Silver Wheaton recently closed with Alexco Resources (AMEX:AXU) could prove lucrative indeed.

Assuming that the relative prices of gold and silver return to near historical norms, part of the gap will likely narrow as a result of gold falling in price, but that's probably not going to account for the complete closure. It will likely also come from silver's rise in price, and Silver Wheaton will reap the rewards. That's certainly what CAPS member TVFuddlehead is banking on:

Silver is clearly the White Gold for so many reasons and few have taken this to heart in the way that Silver Wheaton has. The price of silver will explode upward as the COMEX paper tigers get cremated by physical buying which now commands greater and greater premiums. With physical availability far more difficult and so many new "safe haven" investors in today's global economy seeking refuge, [Silver Wheaton] is a slam dunk... I see the BEST is yet to come!

While the Barnett and Bakken shale formations have garnered attention lately, the Fayetteville shale looks to be the next big fat pipe, with Southwestern Energy reportedly taking a lead role. Others are seeking to break off a shingle, including Chesapeake Energy (NYSE:CHK), which has created a joint venture with BP. In fact, a few joint ventures will likely be sounding the formation's depths.

CAPS member fr3shn3ssporvida looks for Southwestern to continue being a low-cost industry leader in extracting natural gas:

They have 19 drilling rigs working and each one will drill about 20 wells a year. As a leader, [Southwestern] is also developing new ways to fracture the shale more successfully and cheaper.

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?

Perini is a Motley Fool Hidden Gems Pay Dirt pick. Chesapeake Energy is an Inside Value recommendation. If you want to sit at the grown-ups' table, you better take advantage of full access to any of our Foolish newsletters, free for 30 days.

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.