Welcome to the best two-month stretch of the year. Although March and April are jointly productive, on average, with their collective 3% advance from the S&P 500, the combination of November and December is even stronger with its typical 4% rally.
This time around could be a little bit different, mind you. We didn’t see a tumble in September or October, where we’d normally see a lull in one month or the other.
That makes it tough to get excited about taking on new trades, with the threat of a pullback looming ever larger. Still, if you’re looking at the right names in the right situation, you can always find something compelling to buy.
With that as the backdrop, here’s a closer look at the top five stocks to buy for November. Each is well-positioned for progress in the immediate future, boasting either sustainable momentum or brewing up a reversal.
Stocks to Buy for November: Capital One Financial
Just a few days ago, Capital One Financial Corp. (NYSE:COF) posted third-quarter numbers that were better than expected. Namely, revenue of $6.99 billion was better than the projected $6.83 billion, and earnings of $2.14 per share topped estimates for only $2.15 per share of COF stock.
That alone isn’t the reason Capital One Financial has earned a spot on a list of stocks to buy now, however. Neither is the fact that COF stock has been catapulted higher, leaving its moving average lines in the dust after a lackluster middle of the year.
No, what makes this name so compelling for November is that the past two months of the year are generally great ones for the stock, and Capital One shares have been well behind the usual year-to-date pace so far in 2017.
The catch-up effort could be remarkable now that it’s underway.
Stocks to Buy for November: United Parcel Service
It’s admittedly a little bit cliche to step into a shipping stock like United Parcel Service, Inc. (NYSE:UPS) around this time of year … right in front of the busy gift-giving season that involves a lot of deliveries. But, if the history holds up, the reason is irrelevant.
And the history does hold up here. Even in bad years, November is a winner, with UPS gaining 6%. In the average-to-bullish year like we’re seeing in 2017, United Parcel Service shares typically gain on the order of 6%.
The stock’s acting like it’s gearing up for a repeat performance this time around. Just bear in mind the bullishness faded in December.
Stocks to Buy for November: Amazon.com
Speaking of holiday shopping cliches, Amazon.com, Inc. (NASDAQ:AMZN) is another one. Its fourth quarters are generally huge, as consumers scramble to purchase the Christmas gifts they plan to give others, or themselves.
Knowing this is in the cards, traders tend to pump AMZN shares up to the tune of 14% in the month that just got underway … and even more, in some years.
It’s technically overbought, to be fair, with Amazon.com stock surging 13% on Friday immediately following its third-quarter report. This stock is certainly no stranger to tacking on more gains even though it’s technically overbought, however, so we can’t assume fear is automatically going to quell the rally effort right away.
Stocks to Buy for November: Cisco Systems
A year ago it wasn’t clear if Cisco Systems, Inc. (NASDAQ:CSCO) would ever regain the relevancy and success it saw in its early years. Indeed, revenue is still waning as the traditional switch and router business continues to shrink, and competitors come up with the software-centric solutions the market craves these days.
“This has been the challenge CSCO has been facing in recent years – how to add value to its legacy systems before the newer generation of Software as a Service (SaaS) firms and cloud-focused companies start grabbing market share.” Band goes on to note, however, “While the competition is a concern, the encouraging news for CSCO is that because of its size, it has the wherewithal to buy what it needs, if it can’t produce it. And it has begun to do just that.”
That didn’t help the stock much around the middle of this year, but between the way traders are starting to believe and the fact that, for whatever reason, November generally translates into an 8% gain for CSCO shares, add Cisco to your list of stocks to buy before we get too deep into the month.
Stocks to Buy for November: Qualcomm, Inc.
Last but not least, add Qualcomm, Inc. (NASDAQ:QCOM) to your list of stocks to buy for a shot at a healthy November.
Though it’s down for the year, it’s testing the waters of higher highs again, entering November with an above-average head of steam. It generally gains about 8% for this month, and musters a gain in November even in an environment as ugly as the one it’s been in of late.
There’s certainly a valid value argument in support of higher prices for QCOM shares. The forward-looking P/E of 15.8 makes QCOM a better value than most stocks of its ilk.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.