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"Sell in May" Saying Has Flopped This Year: Bet on 3 Stocks

Sanghamitra Saha
Let's see if Tutor Perini Corporation (TPC) stock is a good choice for value-oriented investors right now from multiple angles.

As soon as the broader market hits the fifth month of the year, many investors start selling their equities and go away, paying heed to a popular stock market adage. The proverb can be traced back to the S&P 500’s appalling historical run for the May-to-October period.

But the old adage hasn't proven quite correct in recent years. As per an article published on CNN.com, the trend saw a twist in the past few years with the May-October period turning pretty profitable.

Inside the Letdown of “Sell in May and Go away” Maxim in Recent Years

The S&P 500 upped about 6% from the start of May through the end of October 2017, rose 5% during that month in 2016, jumped 7% in May-October 2014, surged 10% in May-October 2013 and managed to score a meagre gain in 2012. The only exception was 2015 when the market crashed on China’s hard-landing fears and the return of deflationary worries in the Euro zone.

Wall Street Emerges Steady This May

Already, the S&P 500 is up 2.7% this month (as of May 16, 2018), the Nasdaq Composite has generated 3.8% gains and the Dow Jones Industrial Average has managed to add about 2.8% returns. Small-cap index Russell 2000 has advanced 4.3% so far this month to hit a record high.

And why not? The United States is sizzling with the passage of the tax reform and President Trump announcing a drug plan which is in line with the best interest of drug makers. The growth picture appearing from the Q1 earnings season is impressive.

Economically, the United States is better-positioned than other developed economies. The labor market is steady and business and consumer confidence is solid. On the other hand, Europe is slowing down. Emerging market currencies are facing troubles on a surging dollar. 

All in all, investors can definitely cash in on renewed hopes on Wall Street and positive sentiments. A sustained oil price rally and rise in yields could curb the momentum. But that level is probably yet to be reached.

Stock Picks

Below we highlight three high-momentum stocks that have a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a month-to-date price change of more than 50%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Turtle Beach Corporation HEAR

It is an audio technology company. It belongs to a top-ranked (top 41%) Zacks Industry.

Month-to-Date Returns: 253.0%

Zacks Rank: #1

Momentum Score: A

The Trade Desk Inc. TTD

The company is a provider of technology platform for advertising. It comes from a top-ranked (top 44%) Zacks sector.

Month-to-Date Returns: 63.3%

Zacks Rank: #1

Momentum Score: A

Ichor Holdings Ltd. ICHR

It is a multinational biopharmaceutical and diagnostics company.

Month-to-Date Returns: 60.5%

Zacks Rank: #2

Momentum Score: B

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The Trade Desk Inc. (TTD) : Free Stock Analysis Report
 
Turtle Beach Corporation (HEAR) : Free Stock Analysis Report
 
Ichor Holdings, Ltd. (ICHR) : Free Stock Analysis Report
 
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