February has just begun, and the first month of the year proved to be a volatile one for stocks. The S&P 500 historically loses an average of 0.1% in the month of February, but the market has dipped by 7% year-to-date. Oil prices are causing these fluctuations, but there is still uncertainty looming over the broader market in 2016.
Stocks that have a history of beating seasonality and have brought overall strength are a good choice during this difficult investing year.
1. Dollar Tree Inc. (DLTR)
Dollar Tree suffered a very rough Q4 in the beginning before picking up momentum in December. The company’s stock plummeted greatly, but has since recovered. Dollar Tree’s stock is currently down 2% on the day, but we see earning reports from November that the company is outpacing analyst expectations.
The company has a 200-day moving average of $72.94, but more impressively, it has a 50-day moving average of $77.29.
Currently, Dollar Tree is rated as a “strong buy,” according to many analysts. The company’s last declared quarterly earnings showed that it missed earnings-per-share expectations by five cents, but they posted revenue of $4.95 billion, beating estimates of $4.84 billion.
2. Cisco Systems (CSCO)
Cisco has been doing lackluster in 2016, and has already lost 16% of its value this year alone. The company currently trades at 10 times less than its forward earnings, and has routinely been shown to be a reliable, large-cap dividend stock. Currently, the company offers a 3.7% dividend, and many analysts predict that the company’s drop in stock this year was to simply to de-risk their portfolios.
The company has approximately $60 billion in cash, and there is no doubt that it will increase this year. Even if it doesn’t perform well in February, think of it as a bargain stock to buy for the future.
3. Rovi Corporation (ROVI)
Rovi is a company that has struggled for nearly a year. Finally, the company has started to break through his trend and is skyrocketing in 2016. Just today, the company’s stock is up over 4%, and has risen by more than 17.74% on the year. This is one stock that is currently beating the broader market by over 20 percentage points, and it’s expected that the company’s stock will outperform in February.
Based off of seasonal data, Rovi’s stock average is a 6.3% gain in February, so it’s a safe bet in 2016.