5 Top-Ranked Stocks to Play in October for Solid Returns
After a downbeat September, October started on a volatile note. High oil and gas prices, still-high inflation, and the Fed’s policy tightening, along with the resultant rise in bond yields, may keep the market volatile. But then, October is historically upbeat (read: 4 Top-Ranked ETF Winners of Q3 With More Room for Growth).
October has a moderate reputation in the stock market. According to moneychimp.com, a consensus carried out from 1950 to 2022 has revealed that October ended up offering positive returns in 45 years and negative returns in 28 years, with an average positive return of 0.79%.
This year is unlikely to be an exception. While jitters could emanate from rising rates, strength may be added by peaking rates, falling inflation, an improving manufacturing sector and the upcoming holiday season. Investors should note that the Fed’s preferred measure of underlying inflation increased at the slowest monthly pace since late 2020, which may help the central bank to forgo an interest-rate hike at their next meeting.
The core personal consumption expenditures price index, which bars the volatile food and energy components, increased 0.1% in August. The key gauge of services costs watched closely by the Fed also recorded the smallest monthly increase since 2020.
Against such a backdrop, let’s take a look at the stocks that could be good picks in October. Investors can play stocks like JAKKS Pacific JAKK, Snap SNAP, Citizens Financial Services CZFS, Lifeway Foods LWAY and 1-800-FLOWERS.COM FLWS.
Top Stocks to Pick
JAKKS Pacific (JAKK): Consumers are expected to shell out a record $12.12 billion (up from $10.6 billion last year) on Halloween, according to the National Retail Federation. The average consumer is expected to spend $108.24 on costumes, candy, decorations and greeting cards, $10 more than last year, according to the NRF survey (read: 3 Sector ETFs to Win in Holiday Season 2023).
A record number of people, i.e. 73% of Americans look to celebrate Halloween or participate in Halloween activities this year, up from 69% in 2022. No wonder, retail and consumer discretionary stocks should see gains ahead.
JAKKS Pacific is a multi-brand company that has been designing and marketing a broad range of toys and consumer products since 1995. Notably, JAKKS Pacific’s subsidiary — Disguise Inc. — is a leader in the Halloween industry, creating trend-setting costumes and accessories. JAKKS Pacific has an upbeat VGM Score of B. Currently, JAKKS Pacific sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Snap (SNAP): Tech stocks took a beating in the third quarter. But some tech stocks might help them to stage a rebound in October. Within the pack, Internet stocks deserve special mention. Unparalleled growth of high-speed mobile Internet traffic, still-untapped opportunities in emerging markets, especially via the adoption of smartphones and tablets, 5G revolution and a sharp rise in online shopping should translate into the outperformance of Internet stocks.
Snap's flagship product, Snapchat, is a mobile camera application that helps people to communicate through short videos and images called Snaps. The application is one of the most popular and trendy messaging and social media applications in the United States.
Snap has an upbeat Growth Score of B. The Zacks Rank #2 (Buy) stock hails from an industry, which carries a Zacks Industry Rank #83 that places it in the top 33% of 250 Zacks industries.
Citizens Financial Services (CZFS): The journey for bank stocks has been anything but smooth this year. But the tables are probably turning for the segment as the rates are peaking and the yield curve is steepening. Such an interest rate environment will boost banks’ net interest rate margin. Regional deposits and loans also rose in the middle of the year. Plus, most bank stocks have a cheaper valuation than the S&P 500.
Citizens Financial Services, Inc., which currently carries a Zacks Rank #1, is the bank holding company for First Citizens National Bank. The stock has an upbeat Momentum Score of B. The stock hails from an industry, which carries a Zacks Industry Rank #102 that places it in the top 41% of 250 Zacks industries.
Lifeway Foods (LWAY): The pint-sized stocks should gain momentum in the final quarter of 2023 due to a decent U.S. economic recovery, the upcoming holiday season and a still-resilient consumer base. Since small-cap stocks are closely tied to the domestic economy, an uptick in economic outlook bodes well for small caps. These stocks are not heavily export-centric and, hence, do not get battered if the greenback rises. Most importantly, a higher rate environment bodes well for value stocks.
Zacks Rank #2 Lifeway Foods produces Kefir, a drinkable product similar to, but distinct from yogurt, in several flavors sold under the name Lifeway's Kefir. The stock has a moderate VGM Score of C. The stock hails from an industry, which carries a Zacks Industry Rank #107 that places it in the top 43% of 250 Zacks industries.
1-800-FLOWERS.COM (FLWS): With the fourth quarter being one of the upbeat times of Wall Street due to the holiday season, one can bet on festive stocks.
1-800-FLOWERS.COM, Inc. is a leading e-commerce provider of floral products and gifts in terms of number of customers and revenues. The stock has the most upbeat VGM Score of A. The stock hails from an industry, which carries a Zacks Industry Rank #107 that places it in the top 43% of 250 Zacks industries. Currently, FLWS has a Zacks Rank #1.
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JAKKS Pacific, Inc. (JAKK) : Free Stock Analysis Report
1-800 FLOWERS.COM, Inc. (FLWS) : Free Stock Analysis Report
Lifeway Foods, Inc. (LWAY) : Free Stock Analysis Report
Snap Inc. (SNAP) : Free Stock Analysis Report
Citizens Financial Services Inc. (CZFS) : Free Stock Analysis Report
