Contrary to popular belief, April isn’t a lethargic month for the market. Following on from what’s usually a bullish March, the S&P 500, on average, gains 1.2% for the month that just started. So it’s OK to hunt down stocks to buy without worrying about every pick being a dead end.
Perhaps this time around will be different. The index is typically up only 2.1% year-to-date at the end of March, but the S&P 500 is up about 5% this year so far. That sets the stage for some profit taking.
Nevertheless, the tendency is the tendency, and there are a handful of stocks that tend to do well in April regardless of the situation or the environment.
Here’s a look at the five best stocks to buy for gains in April, based on their historical performances.
Best Stocks to Buy for April: Amazon (AMZN)
There’s never really a bad time to buy Amazon.com, Inc. (NASDAQ:AMZN); AMZN shares seem to defy gravity year-round. But, for whatever reason, April is an unusually bullish for month for the e-commerce giant’s stock.
Amazon gains an average of 9.2% this month.
The stock is ahead of its normal pace for the year-to-date, up over 18% versus a normal year-to-date advance of 5.2%. That’s not apt to be a major headwind for Amazon though. This stock can do some pretty amazing things at times.
And, with the latest on-demand video rhetoric saying Amazon rather than Netflix, Inc. (NASDAQ:NFLX) is quickly becoming Hollywood’s preferred partner, anybody on the fence may well be motivated to pull the trigger on an AMZN trade.
Best Stocks to Buy for April: Mastercard (MA)
Of the five top stocks to buy for April gains, Mastercard Inc (NYSE:MA) is easily the most trade-like (and least investment-like) of them all.
That is to say, while April is generally a very good month for MA, there’s rarely any follow-through in May or beyond. Moreover, there’s not much in the way of broader tailwinds pushing MasterCard right now.
Nonetheless, April’s average 4.8% gain for MasterCard makes it a pretty good bet here, particularly seeing how 2017’s performance-to-date is right in line with the stock’s typical annualized path.
Best Stocks to Buy for April: Home Depot (HD)
As was noted last month, after years of lagging its bigger rival, Lowe’s Companies, Inc. (NYSE:LOW) is finally starting to pose a real threat to Home Depot Inc (NYSE:HD).
Don’t read too much into that shift though. Home Depot is still a force to be reckoned with, and Home Depot is heading into its prime time of year with a full head of steam. Namely, the home improvement retailer is firing on all cylinders with its e-commerce effort, and the country is going into the busiest part of the homebuilding season with great expectations for a banner 2017.
It’s this seasonality that likely does most of the heavy lifting for HD this time of year. The stock usually gains 2.9% in April.
As the performance chart above illustrates though, Home Depot isn’t best viewed as a one-month trade. In May, HD typically logs a 4% gain. That makes Home Depot one of the better stocks to buy for the next two months.
Best Stocks to Buy for April: United Technologies Corporation (UTX)
Home improvement retailers aren’t the only stocks that exhibit a bullish tendency around this time of year. Defense contractor names heat up this time of year as well (albeit for less clear reasons).
One of the major names in this group that looks well positioned for a big April is United Technologies Corporation (NYSE:UTX). It’s only up 1.8% year-to-date, and is normally up 5.4% by this point. Better yet, UTX shares gain an average of 3.5% in April. That’s not a giant move, but it’s big enough to bet on when the stock is already so far behind for the year.
Just note that, like Mastercard shares, United Technologies shares don’t generate much follow-through beyond the end of April.
Best Stocks to Buy for April: Intel (INTC)
Last but not least, April is generally a solid month for Intel Corporation (NASDAQ:INTC) shares, but April 2017 may be an especially hot month for the stock in light of the fact that INTC shares are decidedly below their normal pace for the year.
Historically speaking, they’re supposed to be up 6.6% between the end of the year and the end of March. This year, though, they’re down 0.3%. Ergo, the usual 5.3% gain we see from INTC this month could be much greater as the stock plays catch-up.
To the extent a catalyst is needed to jump-start such a move, BlueFin Research Partners analyst Steve Mullane may have just provided it, saying this morning:
“Our one-quarter lag production model suggests that INTC production plan this quarter remains ahead the current Wall Street revenue consensus of -3.0% for the June quarter. Our latest Q1 PC OEM shipment reads indicate a stronger than expected March, resulting in shipments slightly above the high-end of our forecast range of 64-65M units.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.