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We’re headed into the summer doldrums — a slow time of year for stocks to buy. It’s understandable, as long-term investors have other things floating around their minds, such as ball games, vacations, fishing and spending time with family.
Still, all things considered, the average June gain for the S&P 500 Index of just under 1% isn’t too shabby, even if it’s difficult to find the names that tend to lead the modestly bullish march.
To that end (though it took a lot more digging than usual), here’s a closer look at the top five stocks to buy for June. These are based on their historical returns this time of year, so it’s crucial to pay attention to industry- or company-specific news that could turn June upside down for even the more seasonally strong players.
That said, preference was given to companies that are below their typical trend, but look like they’re starting to play catch-up.
Top Stocks to Buy: Verizon (VZ)
Verizon Communications Inc. (NYSE:VZ), like most other wireless carrier stocks, has had a forgettable 2017 so far. Its loss of 13% since the end of 2016 is not only painful, it’s miles away from the 6% year-to-date gain it would have typically mustered by now.
That weakness, though, it what makes VZ one of the more attractive stocks to buy this early in June. Aside from the 4% advance it generally sees this month, there’s a ton of space for it to rally this year before feeling the weight of any rebound gain.
BTIG Research’s Walter Piecyk made a point of recently noting that “the set-up for Verizon’s stock is very tempting to take a shot on the long side.” That’s because VZ stock is one of the few names that isn’t saddled with some sort of headache, burden or expense. Piecyk price target is $51.
Top Stocks to Buy: Ulta Beauty (ULTA)
What’s that? A beauty supply company has earned a spot on a list of the best stocks to buy this month? It’s true. In fact, Ulta Beauty Inc (NASDAQ:ULTA) has convincingly earned a spot on the roster.
ULTA stock gains an average of 4.5% in June, though it’s worth noting there’s rarely a bad time of year to own this surprisingly hot stock. So far this year, ULTA appears to be right on its usual course of progress, rising some 20%.
The secret to Ulta Beauty’s persistent and impressive bullishness isn’t exactly hush-hush. Ulta Beauty was able to grow its top line to the tune of 23% last quarter because it developed a winning mix of in-store customer experiences and the convenience of buying its wares online.
That’s not apt to change anytime soon, either. Cosmetics and related goods are just something many consumers simply prefer to purchase in person.
Top Stocks to Buy: Oracle (ORCL)
As was the case with Ulta Beauty, there’s never really a bad time of year to own Oracle Corporation (NYSE:ORCL). It’s just that June happens to be a very good time of year for the stock, averaging a gain of 8.1%.
ORCL stock is trending firmly this year as well, just a little ahead of its usual pace (but not so far ahead as to preclude more upside).
Theoretically, the database giant should be backpedaling, at best. Microsoft Corporation (NASDAQ:MSFT) as well as Amazon.com, Inc. (NASDAQ:AMZN) are both taking dead aim at Oracle’s customers, and salesforce.com, inc. (NYSE:CRM) CEO Marc Benioff says his company is “crushing” Oracle. In fact, there’s no denying Oracle’s top and bottom line have been shrinking of late.
Yet Oracle always seems to have a response to its competitors’ initiatives, like its recently unveiled “Customer to Meter” solution for utility companies. It just works, and ORCL shares just manage to keep climbing.
Top Stocks to Buy: Old Dominion (ODFL)
Relatively obscure trucking outfit Old Dominion Freight Line (NASDAQ:ODFL) may be one of the market’s best-kept secrets.
ODFL stock has gained nearly 600% over the course of the past ten years, and while 2017 to-date hasn’t been quite so thrilling, we’re headed into a bullish time of year for the transportation business.
In fact, it’s the relative weakness we’ve seen of late that makes ODFL stock such an interesting prospect right now — it’s got plenty of room to rally before even matching its usual yearly-performance path.
Be that as it may, do realize that while Old Dominion averages a gain of between 2% and 3% from its early June low, this is a two-month trade. ODFL shares typically soar more than 9% in July.
Top Stocks to Buy: Celgene (CELG)
Last but not least, add Celgene Corporation (NASDAQ:CELG) to your list of stocks to buy in June, as it generally moves forward in the month to the tune of about 1%.
Note, however, that like Old Dominion Freight Line, this is actually a multi-month trade. CELG shares average a gain of 18% between the end of May and the end of September.
That said, clearly 2017 hasn’t been a banner year for Celgene shares. While CELG stock started on the right foot, the shares fell into the red last month and are now only up 59 basis points for the year. Much of the lackluster performance came in response to its first-quarter report that topped earnings expectations, but fell short of estimates on the revenue front.
There’s a certain “enough is enough” feel to the selloff though, especially in light of the fact that Celgene’s multiple sclerosis drug ozanimod continues to impress in its trials, and its multiple myeloma drug Revlimid could become the world’s second-best selling cancer treatment this year.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.