No one is quite sure what to expect in the weeks ahead with the coronavirus. However, spring time still brings investors some options of possible stocks to buy.
As the weather outside gets warmer, we wanted to take a quick look at some of the top stocks that have run higher on seasonal patterns every year. For example, as the weather warms up, we typically see more travel and leisure plans, planting and higher energy.
American Airlines (NASDAQ:AAL) and JetBlue (NASDAQ:JBLU), for example, tend to push higher as folks book travel plans, as does Hilton Hotels (NYSE:HLT). As the weather turns warmer, planting stocks like Scotts (NYSE:SMG) tend to push higher. Stocks like Exxon Mobil (NYSE:XOM) even push higher as energy demands pick up momentum. Even home improvement stocks begin to push higher, like Lowe’s (NYSE:LOW).
While Spring 2020 could be challenging, we still wanted to point out some of the top seasonal stocks that tend to push higher — including:
- Scotts (SMG)
- Lowe’s (LOW)
- Hilton Worldwide (HLT)
So, let’s dive right in.
Stocks to Buy: Scotts (SMG)
This is the time of year when seasonality causes demand for its products substantially increases. Even with the novel coronavirus floating around, it’s not likely to interfere with spring planting season or crop cycles. That being the case, SMG stock may be one the year’s safest bets.
Moreover, it tends to push higher as temperatures rise — in most years. Starting in March 2016, for example, the SMG stock ran from $63.70 to a high of $73.37 by August 2016. In March 2017, it ran from $84.34 to a high of $90.67. 2018 turned into a disaster. However, by 2019, the SMG stock exploded from a March 2019 low of $79.49 to $112.78. All thanks to higher demand for its lawn, garden, and pest control products.
So even with the coronavirus, I strongly believe shares of SMG could rally back to $120 near-term on the seasonal trend.
Lowe’s also tends to push higher with the spring season — it’s busiest time of the year. Not only does it run higher on planting goals, it pushes higher as folks repair and upgrade homes. Back in January 2020, it was looking to hire as many as 53,000 people just to keep up with demand. Starting in March 2016, LOW stock ran from a low of $63.52 to a high of $76.74. In March 2017, it exploded from $75.81 to a high of $81.55. In 2018, it ran from $83.81 to a high of $114. And in 2019, it ran from $101.30 to a high of $120.
Additionally, CEO Marvin Ellison believes the latest pullback is a bit overdone. In early March 2020, he bought 10,000 shares at just under $104 per share for $1 million. That’s a big vote of confidence, and tells me Lowe’s will be able to weather the coronavirus storm. Plus, with rates at all time lows, and stimulus hitting most bank accounts in the U.S., coupled with seasonality, we could see a sharp recovery in the stock near-term.
I’d like to see LOW stock refill its bearish gap around $125 shortly.
Hilton Worldwide (HLT)
While 2020 may not be an exemplary year for travel thanks to the coronavirus, it’s still worth keeping an eye on. In a typical year, the stock tends to move higher as folks book spring and summer travel plans at hotels and resorts.
Getting caught up in that demand is Hilton. Starting in March 2016, for example, shares of HLT ran from a March low of $41.39 to a high of $48.05. In March 2017 the stock ran from $55.91 to a high of $77.78. In 2018, it pushed only slightly higher from $77.70 to $83.39 before pulling back with the broader market. By 2019, it was off to the races again, jumping from a March low of $82.69 to a high of $100.37.
Therefore, while travel plans will be put off thanks to virus concerns, once those fears have dissipated, I’d like to see HLT stock refill its gap around $112 per share.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, he did not hold a position in any of the aforementioned securities.