12 big stocks set to sizzle this summer

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Grab your beach towel and calculator – summer starts this weekend. Don’t let your portfolio miss out on some hot action.

Summer’s not a great period for stocks. But there are 12 stocks in the Standard & Poor’s 500, including coffee brewer maker Keurig Green Mountain (GMCR), fertilizer maker CF Industries (CF)and gadget maker Apple (AAPL) that not only beat the market every summer the past five years – but analysts see more upside, according to a USA TODAY analysis of data from S&P Capital IQ. All these stocks are expected to rise before hitting analysts’ 18-month price targets.

Summer isn’t known as being the greatest of seasons for stocks. The average gain from the low of the summer to the high has been 9.2% since 1964, says The Stock Traders Almanac. Summer is the poorest performing season by this measure.

Chart source: The Stock Trader's Almanac via Microsoft Excel

Lately, summer has been just as unpredictable – cementing its shaky reputation with investors. Last summer the Standard & Poor’s eked out a tiny 1% gain – making the traders who sold in May pleased that they didn’t miss much as they stayed away. Investors got completely burned in the summer of 2011 with a 12.3% decline. But summer, too, can be decent. The S&P 500 generated 7.4% and 7.7% gains during the summers of 2013 and 2012, respectively.

Chart source: S&P Capital IQ via Microsoft Excel

With that said, there are stocks that have consistently been beating the market. Take Keurig Green Mountain. The stock has gained by an average of 20% over the past five quarters – well above the 1% average gain by the Standard & Poor’s 500 during the same time. Last summer, the stock rocketed 8.1% – blowing away the 1% gain by the market. This summer, though, could be a big test for the stock’s summer prowess. Shares are under pressure this year following disappointing first-quarter results. But analysts are still thinking this stock can bounce big-time from the current level – and are calling for 39% upside in 18 months.

Chart source: S&P Capital IQ via Microsoft Excel

Some of the top stocks of the summer make logical sense. CF Industries has been a stellar performer during summer – posting average gains of nearly 20% – as the investors anticipate the company’s second-quarter profit report. Traditionally, the second quarter is one of the strongest for the company thanks to the spring seasonal pickup in business. Analysts see 1.7% upside in the stock over the next 18 months – but maybe the seasonal strength will surprise everyone with a little something extra?

Chart source: S&P Capital IQ via Microsoft Excel

And then there’s Apple – which seems to be a stock that works no matter the season. Summer is a hot one, too, for Apple shares. Shares of the gadget maker have gained 15% on average the past five summers. Last summer alone – shares soared 12.9% as investors piled in ahead of the blockbuster-to-be in its supersized smartphone. Analysts are calling for this stock to be trading 17% higher in 18 months.

Are these stocks guaranteed to sizzle again this summer? Absolutely not. But they sure look great with a tan in the summer.

S&P COMPANIES THAT BEAT THE MARKET IN EACH OF THE PAST FIVE YEARS – WHERE ANALYSTS SEE UPSIDE TO 18-MONTH TARGETS

Company Symbol Avg. summer gain past 5 yrs % upside to target
Keurig Green Mountain GMCR 20.6% 39.2%
CF Inds. CF 19.8% 1.7%
Apple AAPL 15.3% 17.4%
L Brands LB 13.3% 15.5%
Celgene CELG 12.7% 21.4%
McGraw Hill Fin’l MHFI 12.2% 12.7%
Discover Fin’l DFS 10.4% 20.8%
Allergan AGN 10.3% 16.7%
eBay EBAY 9.6% 3.7%
Biogen BIIB 8.7% 19.7%
Costco Wholesale COST 8% 12%
Discovery Comms. DISCA 5.8% 2.1%

Sources: S&P Capital IQ, USA TODAY research

 

[“source – americasmarkets.usatoday.com”]