Tired of thinking about all the money you've lost on S&P 500 stocks this year? Luckily, some of them shake off the summer malaise.
More than a dozen S&P 500 stocks, including industrial company Generac Holdings, consumer discretionary CarMax and tech giant Apple, outperformed the S&P 500 in each of the past five summers, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. All also posted average gains in the past five summers of at least 8%. Seeing green in the summer, which officially kicked off this week, would be a welcome sight for investors pounded all year.
"We believe the likelihood that stocks are much higher a year from now is high," said Ryan Detrick of LPL Financial. "That doesn't mean stocks can't go down further in the short term, and forming a bottom could easily take a good chunk of the summer."
Cruel Summer For The S&P 500.
Finding winners in the summer isn't easy. Markets can get tough in the summer months. "The 'summer rally' in most years is the weakest rally of all four seasons," says Stock Trader's Almanac.
The S&P 500 has only risen by an average 9.4% during the summer months since 1964, says Stock Trader's Almanac. That pales next to the 13.1% average gain of the S&P 500 during the winter. Even the seemingly impressive 25.2% summer rally in 2020 lagged the rally in the spring, the almanac says. "No matter how thick the gloom or grim the outlook, don't despair. There's always a rally for all seasons, statistically."
But where is the rally in the summer?
Industrials Shine In The Summer
No single S&P 500 sector dominates in the summer. But industrials hold more than their fair of winners during the season. Three of the 13 S&P 500 stocks that do best in the summer are industrials.
Take the well-run maker of power generators, Generac, as an example. The stock easily topped the S&P 500 in each of the past five summers. Last summer, for instance, shares rose 14.5%, versus merely 5.5% for the S&P 500. And it's not just a lucky summer, either. Shares of the company are up an average of 27.1% in the past five summers. That, again, tops the S&P 500. The index's average gain in that same period is just 4.6%.
Generac investors could sure use a sign of life coming out of the company. Shares are down more than 36% this year so far. And yet, the fundamentals look strong. Analysts think the company will earn upward of $11.81 a share in 2022, up more than 22% year over year. Additionally, the company is expected to report its June quarter results on July 29. And when it does, Wall Street is looking for a profit of $2.65 a share, up nearly 11%.
Waiting For A Summer Bounce
Pounded by the S&P 500's 20% drop this year, investors naturally are looking for relief. Some might look to Apple.
Shares of the iPhone maker do tend to perform well in the summer. They've topped the S&P 500 in each of the past five summers. And they've risen an average 14.2% during the midyear season. Dan Ives, analyst at Wedbush, thinks Apple is the kind of durable tech blue chip you can have faith in. And that's despite the stock falling 14.2% this year.
There's no guarantee a solid summer performance will continue, though. But if you're looking for some relief from June gloom, these S&P 500 stocks at least have a solid track record.
Summer S&P 500 Charmers
These top S&P 500 stocks topped the market in each of the past five summers
| Company | Symbol | Summer average % Gain (past five years) | Sector |
|---|---|---|---|
| Generac Holdings | 27.1% | Industrials | |
| CarMax | 14.7 | Consumer Discretionary | |
| Apple | 14.2 | Information Technology | |
| Dover | 14.1 | Industrials | |
| Agilent Technologies | 11.7 | Health Care | |
| Cintas | 11.7 | Industrials | |
| Accenture | 11.6 | Information Technology | |
| Synopsys | 11.4 | Information Technology | |
| Charter Communications | 11.2 | Communication Services | |
| Procter & Gamble | 10.2 | Consumer Staples | |
| Brown & Brown | 9.2 | Financials | |
| Walmart | 9.0 | Consumer Staples | |
| Arthur J. Gallagher | 8.7 | Financials |
