Stocks are drifting lower on Monday in the final trading day of April. A spate of mergers and acquisitions (M&A) related news initially sent stocks higher — as well as lingering optimism over solid Big Tech earnings from last week — but fresh concerns about trade tensions with China and the approach of earnings from Apple Inc. (NASDAQ:AAPL) after the close Tuesday trimmed those gains and pushed the major averages into the red.
The tech-heavy Nasdaq is being hurt the worst, down 0.6% as I write this.
Of course, investors are also no doubt concerned about the beginning of May, which starts the worst six months of the year for the stock market on a seasonal basis. Remember, “sell in May and go away.”
But with stocks already well off of their January highs, there’s the specter of a rebound led by key pockets of strength. Here are five stocks that are possible buys if this contrarian attitude of optimism prevails:
Stocks to Buy in May: Wal-Mart (WMT)
Walmart (NYSE:WMT) shares look ready to emerge from a three-month consolidation range with a test above both its 50-day and 200-day moving averages on Monday.
The range capped a 22% decline from its late January high amid concerns about slowing consumer spending — which was reflected in the slowdown in GDP growth in the first quarter from the feverish pace seen during the holiday shopping season. But with wage growth on the verge of a liftoff, spending should perk back up later this year.
The company will next report results on May 17 before the bell. Analysts are looking for earnings of $1.12 per share on revenues of $119.4 billion. The company last reported on Feb. 20 earnings of $1.33 missed estimates by four cents on a 4.2% rise in revenues.
Stocks to Buy in May: Facebook (FB)
Facebook Inc (NASDAQ:FB) shares are on the move, threatening to push back above their 200-day moving average after losing that level back in March, thanks to the reporting of blowout quarterly results that put to bed any worry about a blowback from the Cambridge Analytica data privacy scandal. A return to the prior highs would be worth a 13% gain from here.
The company will next report results on July 25 after the close. Analysts are looking for earnings of $1.66 per share on revenues of $13.3 billion. When the company reported on April 25, earnings of $1.69 beat estimates by 36 cents on a 49% rise in revenues.
Stocks to Buy in May: Apple (AAPL)
Apple stock looks set for a move back above its 200-day moving average, mirroring the short-lived excursions below this level seen back in February.
Shares have been struggling to break up and out of the mid-$170s levels and peaked at $183.50 in March amid ongoing worries about the level of demand for the iPhone X and its $999 price tag.
A few weeks ago, shares were hit after a key supplier warned about ultra-high-end smartphone demand falling short of expectations.
All eyes are on the company’s numbers due after the close Tuesday, with analysts looking for earnings of $2.68 per share on revenues of $61.02 billion.
Stocks to Buy in May: Fitbit (FIT)
Fitbit Inc (NYSE:FIT) shares are perking up in a big way, threatening to push above their 200-day moving average for the first time since early January as the troubled wearables market looks set for a turnaround.
IDC reported that worldwide wearables device shipments are set to grow 15.1% this year, creating an opportunity for the company as a maker of cheaper fitness-focused alternatives to more expensive options from the likes of Apple.
The company will next report results on May 2 after the close. Analysts are looking for a loss of 19 cents per share on revenues of $247.6 million.
When the company last reported on Feb. 26 a loss of two cents per share missed estimates by two cents on a 0.5% decline in revenues.
Stocks to Buy in May: Under Armour (UAA)
Under Armour Inc (NYSE:UAA) shares look set to rise above a three-month consolidation range with resistance near $18.50 which would mark the end of a long downtrend for the troubled sportswear maker going back to 2015.
A return to the prior high would be worth a double from current levels. Sentiment looks set for a rebound after bad headlines related to a security breach of its fitness app.
The company will next report results on May 1 before the bell. Analysts are looking for a loss of five cents per share on revenues of $1.1 billion. When the company last reported on Feb. 13, a breakeven result matched estimates on a 4.6% rise in revenues.
Anthony Mirhaydari is the 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.
