Along the lines of our Stock Seasonality Trends report, Monday morning we took a look at which S&P 500 sectors and stocks have historically seen the best and worst returns during the Summer months over the last ten years. While we don’t advise investors to base their trading solely on the calendar, there is evidence that the market and many stocks do indeed follow seasonal patterns. If you like this kind of analysis, you will love the weekly Stock Seasonality Trends.
The chart below summarizes the average performance of the S&P 500 and all ten sectors from 6/10 through 8/31 over the last decade. As shown in the chart, the last ten summers have been dominated by Utilities (2.06%) and Technology (1.72%), which are two sectors that you don't normally see moving in tandem with each other. On the downside, Industrials (-0.27%) and Financials (-0.22%) are the only two sectors that have averaged declines during this period. For the S&P 500 as a whole, the index has averaged a gain of 0.49%. It is interesting to note that even though the S&P 500 has averaged just modest gains over the last ten summers, seven out of ten sectors have seen average returns that are better than the index itself.
In terms of individual stocks, the table below lists the fifteen stocks in the S&P 500 that have seen the best average returns from 6/10 - 8/31 over the last ten years. Topping the list are shares of CF Industries (CF). While the stock has only been public for seven prior summers, it has never had a down summer, averaging a gain of 18.1%. Other stocks on the list of winners that have been positive in at least eight of the last ten summers include Alexion Pharma (ALXN), Apple (AAPL), Cummins (CMI), Expedia (EXPE), Ventas (VTR), Crown Castle (CCI), American Tower (AMT), FMC Technologies (FTI), and Freeport McMoran (FCX). Two other notable names on the list are Intuitive Surgical (ISRG) and Priceline.com (PCLN). Even though these two stocks have both averaged gains of more than 14% over the last ten summers, they have only been up 60% of the time. That trait alone highlights the volatility that is a characteristic of both stocks.
As noted above, the Technology sector has been one of the best performing sectors during the summer months. That being said, it has not been a tide that has lifted all boats. As shown in the table of S&P 500 stocks with the worst average performances during the summer months, more than half of them are from the Technology sector. Topping the list are shares of Yahoo (YHOO), which have been down from 6/6 - 8/31 in nine out of the last ten years, averaging a decline of 9.1%. Marissa Mayer has been credited with helping to turn around YHOO's share price since she was hired as CEO last summer, and shareholders are hoping that she can continue to work her magic and reverse this nasty summer streak.