June is a month some S&P 500 investors would like to skip. But it’s still a good month to stay engaged with stocks, especially if you’re invested in Elon Musk’s Tesla (TSLA).
It turns out shares of Tesla along with eight other S&P 500 stocks, like industrial firm Generac (APA) and health care company Dexcom (DXCM), tend to outperform in the sixth month of the year, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. All nine of these stocks topped the S&P 500 during June for the past five years.
And that’s good news for these stocks, and unusual during a typically ho-hum month for the S&P 500. Finding winners in June is tough. It’s especially good news for Musk, who still owns nearly 16% of Tesla. Tesla shares have been falling all year.
“June is not a month associated with market fireworks,” said Sam Stovall, strategist at CFRA. “It seems as if investors traditionally take the month off.”
But not Tesla investors.
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Looking At The S&P 500 In June
June traditionally isn’t a month to make S&P 500 investors’ hearts soar. It’s below average by most accounts.
The S&P 500’s 0.1% average return during the month going back to 1950 ranks it just ninth among all the months, says “Stock Trader’s Almanac.” And you don’t have to look back far to recall some dismal months of June. In June 2008, for instance, the S&P 500 plunged 8.6%. That was its worst-ever month of June, the almanac says.
More recently, though, June has worked out better for investors. The S&P 500 gained 2.4%, on average, during June in the past five years. And get this: The S&P 500 hasn’t fallen during the month of June in any of the past five years.
And that’s what makes the handful of S&P 500 stocks that have topped the market in June in all of the past five years more impressive.
Tesla Is A Big June Winner
If you’re the kind of investor who likes to take June off, Tesla might convince you otherwise.
The electric-car maker has rocketed 17%, on average, just in the month of June in the past five years. And it’s outperformed the S&P 500 in every month of June in that time, too. In fact, Tesla stock hasn’t fallen in any month of June since 2016. Given that Musk is Tesla’s No. 1 investor, a June rally would be very good news for him. Interesting, though, Tesla’s shares are in for a real test this June. Shares are down nearly 30% just this year so far.
Investors will need to look for data other than earnings to react to during the month. Analysts think the June-ended second quarter will be strong for the company. They’re estimating Tesla will make $2.20 a share in the quarter, up more than 50% vs. the same year-ago period. But investors won’t know for sure until July 22, which is when Tesla is expected to report second-quarter results.
Lighting Up Winners In June
Given the huge demands for power during summer months, it’s not surprising to see Generac put up strong stock gains in June. The well-run company’s stock jumped nearly 14% during June in the past five years.
And like Tesla, shares of Generac haven’t fallen during the month of June since 2016. Analysts think Generac’s earnings per share will jump nearly 11% in the June-ended quarter. It reports results on July 29. The stock could use some good news, too, as shares are down nearly 30% just this year so far.
Also in need of good news is Dexcom, a maker of insulin measurement devices. Shares are down a crushing 44% this year, a stark reversal from many years of outperformance. And June is usually very generous to Dexcom investors. Shares jump nearly 13%, on average, during June. This June, though, the fundamentals aren’t offering much of a lift. Earnings per shares are only expected to hit 76 cents, identical to the same period a year ago. The company reports June-ending quarterly results on July 28.
To be sure, there’s no guarantee these June S&P 500 champions will repeat this year. But they do make a month many investors bail out on more interesting for those who do stick around.
Top S&P 500 Stocks In June
All topped the S&P 500 during June in each of the past five years
|Company||Symbol||Average June stock % ch.||Sector|
|Motorola Solutions||(MSI)||6.5||Information Technology|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz