Investors sometimes struggle to find stocks to buy in October, as the month has a well-earned reputation for being spooky. After all, it’s the scene of a number of historic market crashes and it represents the end of the six-month period of underperformance in the market that starts in June (“Sell in May” remember?).
Moreover, many of these crashes have happened in years that end with “7”: 1987 and the 554-point drop in 1997. Other collapses happened in 1929, 1978/1979, and 2008.
But recent history suggests room for some optimism. Stocks have shown a steadfast resistance to any sustained weakness over the past year, as the post-election Trumphoria rally refuses to quit. Moreover, the stocks over at the Trader’s Almanac note that over the past 21 years, October has actually been a solidly performing month. In fact, it’s the Nasdaq’s single best month with an average gain of 2.4%.
It’s the second-best month for the S&P 500. And the third-best month for the Dow Jones Industrial Average.
With that in mind, here are five stocks to buy that look ready to run higher all the way through Halloween:
Stocks to Buy: Caterpillar (CAT)
Caterpillar Inc. (NYSE:CAT) shares are breaking up and out of a two-month trading range in what looks like a continuation of the stair-step uptrend that started earlier in the year. CAT shares are already up roughly 40% since April, but it still looks like one of the better stocks to buy as its shares look ready for another surge higher. UBS analysts upgraded the stock a few weeks ago on the belief the current earnings up-cycle would continue.
CAT will next report results on Oct. 24. Analysts are looking for earnings of $1.25 per share on revenues of $10.7 billion. When the company last reported on July 25, earnings of $1.49 beat estimates by 23 cents on a 0.6% rise in revenues.
Stocks to Buy: 3M (MMM)
3M Co (NYSE:MMM) shares are breaking up and out of a five-month-long inverted head-and-shoulders pattern with a jump over neckline resistance near $215. The move in MMM traces to an upside target of around $230, which would be worth a gain of roughly 7% from here. Morgan Stanley analysts raised their price target on Monday to $201, while analysts at JP Morgan moved their rating to neutral late last month, showing skepticism is still there to be overcome.
MMM will next report results on Oct. 24, before the bell. Analysts are looking for earnings of $2.21 per share on revenues of $7.9 billion. When the company last reported results on July 25, earnings of $2.58 per share beat estimates by a penny on a 1.9% rise in revenues.
Stocks to Buy: Advanced Micro Devices, Inc. (AMD)
Advanced Micro Devices, Inc. (NASDAQ:AMD) shares look ready to lift up and off of their 200-day moving average. This is a level AMD has been playing touchy-feely with for months in preparation of a possible breakout from a year-long trading range. Shares have been helped by word Tesla Inc (NASDAQ:TSLA) is looking to partner with the company on AI driving hardware.
AMD will next report results on Oct. 19, after the close. Analysts are looking for earnings of 7 cents per share on revenues of $1.5 billion. When the company last reported on July 25, earnings of 2 cents per share beat estimates of a breakeven result on a 19% rise in revenues.
Stocks to Buy: CenturyLink (CTL)
Centurylink Inc (NYSE:CTL) shares are getting a lift, rising above their 50-day moving average for the first time since June. This appears to be the start of an exit from a three-month consolidation range. CTL stock got some good news this week when it was confirmed its acquisition of Level 3 Communications, Inc. (NYSE:LVLT) was cleared by government regulators.
CTL will next report results on Nov. 1, after the close. Analysts are looking for earnings of 46 cents on $4.06 billion in revenues. When it last reported on Aug. 2, earnings of 46 cents per share missed estimates by 3 cents on a 7% drop in revenues.
Stocks to Buy: Disney (DIS)
Walt Disney Co (NYSE:DIS) shares look ready for at least a temporary reprieve from its seven-month downtrend — worth a decline of 13% from its highs — as worries over cord cutting, falling ESPN revenue and the looming launch of its own over-the-top streaming entertainment service look a bit overdone here. After an impressive run into the highs set in 2015, DIS shares have struggled since.
DIS will next report results on Nov. 9, after the close. Analysts are looking for earnings of $1.19 per share on revenues of $13.5 billion. When the company last reported on Aug. 8, earnings of $1.58 per share beat estimates by 3 cents despite a 0.3% decline in revenues.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
