Constructing A Basket Of High-Flying Fall Stocks

By: Wayne Duggan

This year, the fall season officially spans from September 23 to December 21. Since 2010, the S&P 500 has averaged a 5.9 percent return during that date range, but many stocks have done a lot better than that.

If you’re looking to put together a basket of historically strong fall performers, here’s a list of names to consider.

Wyndham Worldwide Corp (NYSE: WYN)
Just because summer vacation is over doesn’t mean that Wyndham’s hotels, such as Ramada, Days Inn, Super 8 and Howard Johnson, stop raking in the cash. In the past five years, Wyndham’s stock is averaging 15.8 percent gains during the fall months.

Mylan NV (NASDAQ: MYL)
Generic drug maker Mylan has been a major fall gainer in recent years. Incredibly, the stock has produced at least 11 percent gains during the fall months in each of the last five years and is averaging a 16.3 percent return per season.

Kansas City Southern (NYSE: KSU)
Railroad giant Kansas City Southern has had a rough year so far in 2015, enduring a more than 20 percent drop in share price year-to-date. However, shareholders are welcoming the arrival of fall and hoping that the stock can recapture the 17.0 percent average gains it has produced over the past five fall seasons.

Lowe’s Companies Inc (NYSE: LOW)
Home improvement company Lowe’s is riding a five-year fall winning streak that has produced an average return of 17.8 percent. Shareholders are hoping that the company’s recent efforts to expand into Canada will serve as a catalyst for the stock.

Delta Air Lines Inc (NYSE:DAL)
You’ll quickly notice a recurring theme when it comes to the performance of airline stocks this time of year. Over the past five fall seasons, Delta has averaged a 17.9 percent gain.

Ameriprise Financial Inc (NYSE: AMP)
Ameriprise is arguably the best value play in the list. Not only has the stock averaged an 18.3 percent gain during the fall months, its current P/E ratio of around 14.0 is well below both the industry average and the overall market average.

Western Digital Corp (NASDAQ: WDC)
Hardware storage companies like Western Digital are fighting tooth-and-nail to compete with growing competition from cloud-based storage companies, but you wouldn’t know it this time of year. Western Digital has produced at least a 5.0 percent gain in each of the last five fall seasons, averaging an annual return of 18.8 percent.

United Continental Holdings Inc (NYSE: UAL)
As previously mentioned, it’s hard to compete with the airline industry this time of year, and United is no exception. In the past five years, United is averaging an 18.9 percent gain during the fall months.

JetBlue Airways Corp (NASDAQ: JBLU)
Remarkably, the top fall performer in the group is JetBlue. JetBlue has produced gains of 25 percent or higher in three of the past five falls, including an incredible 42.8 percent gain during fall of 2014. Overall, the stock is averaging a 20.1 percent gain during the fall months.

How To Play It

An equal position in each of the stocks mentioned above would have produced an average fall-season gain of 17.9 percent since 2009. Not only is that gain an outperformance (vs. the S&P 500) of about 12 percentage points in three months, it also represents an incredible annualized return of about 71.6 percent.

Of course, it’s important to remember that the overall market has typically performed well during the fall season in recent years, and past outperformance by these stocks does not guarantee future gains.

Disclosure: the author holds no positions in any of the stocks mentioned.

Lime Brokerage LLC is not affiliated with these service providers. Data, information, and material (“content”) is provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lime Brokerage LLC does not endorse, offer or recommend any of the services provided by any of the above service providers and any service used to execute any trading strategies are solely based on the independent analysis of the user.

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