10 stocks that can bust through the June gloom
June isn't known for shining on investors very brightly - it's actually a pretty dismal month. But there are a few stocks that bust through all the June gloom and reward investors for sticking with the market instead of heading to the beach.
There are 10 stocks in the Standard & Poor's 500, including makeup seller ULTA Salon (ULTA), healthcare equipment maker Edwards Lifesciences (EW) and online travel agent Expedia (EXPE) that have beaten the market each and every June the past five years, according to a Paste BN analysis of data from S&P Global Market Intelligence. Each of these stocks has also posted at least 4% or greater gains on average in the month the past five years. Compare that to the S&P 500, which has gained just 0.1% during those periods.
Stock investors have good reason to be a bit gloomy come June. They have lost money on the market in six out of the past 10 years during the month. During the past 10 years, the S&P 500 has sunk an average of 1.5% in the month including a nearly 9% hit in June of 2008. Longer term, it isn't much better, ranking the 11th lowest month for performance, says "Stock Trader's Almanac" based on the S&P 500.
"June is historically a ho-hum month, showing both little in the way of price increases as well as volatility," says Sam Stovall, U.S. equity strategist at S&P Global. "Since 1945 it essentially saw the S&P 500 go nowhere in price."
But there's a glimmer of brightness to be found for investors willing to look for it.
ULTA Salon, the Illinois-based seller of cosmetics, fragrances and skincare has been a bright spot during the month. The stock has generated an average monthly gain of 7.8% in June the past five years. Last year, the stock gained 1.2% when the broad market fell 2.1% during the month. ULTA can get even prettier, as shown in June 2013, when the shares soared 10.3%. There could be some earnings support for the stock coming, too, because analysts are calling for adjusted profit in the current quarter to rise 20% (the company's fiscal quarter ends in July). Shares are up 28% already this year to $233.01, but analysts think the stock could be worth $243.76 a share or nearly 5% more in 18 months.
The month also worked out well for shareholders of Edwards Lifesciences. The company, which makes products to treat cardiovascular disease, has been a popular stock as the summer kicks off. Not only have the shares topped the market in each of the past five years, they have delivered an average monthly gain of 7%. Last year's 9% gain ranked Edwards the top performer among all the June winners. Longer-term, the stock has been a consistent champ in the month, too, turning in an average 6% average annual gain in June going back a decade. And Edwards is one just just three stocks in the S&P 500 -- the others being cleaning supply maker Ecolab (ECL) and robotic surgery company IntuitiveSurgical (ISRG) -- that have topped the S&P 500 in each and every June the past 10 years straight.
Some June stock winners just make sense like Expedia. Consumers who haven't booked their summer plans yet will likely be doing it soon and many will use Expedia to do so. Investors are likely trying to get into the stock well before the company's third quarter, ended in September, which tends to be its busiest and most profitable of the year. Expedia has gained 4.4% on average in June going back five years.
Investors can't assume just because some stocks have shined in the month will continue to do so. Even Expedia had some rocky Junes - such as the rough patch between 2008 and 2010 when the stock dropped an average of 17% during June as travel slowed down amid the recession.
These big winners, though, highlight how bailing out on the market during June could leave you missing out on some gains that are worth sticking around for.