For S&P 500 investors, September is a scary month for good reason. It’s the worst month of the year for stocks. But it doesn’t have to be that much of a downer.
More than 10 brands including general consumer goods caesars entertainment (CZR), Material Company mosaic (MOS) and Finance metlife (MET) consistently outperformed the S&P 500 in a difficult September. All 12 of these stocks have outperformed the S&P 500 every September for the past five years, according to Investor’s Business Daily, which analyzed data from S&P Global Market Intelligence and MarketSmith.
Finding strains that can defy the pain of September can be a huge boost during a traditionally difficult month.
“The S&P 500 posted its worst average monthly price change since World War II in September, with only one decline in February,” said CFRA strategist Sam Stovall. “September is the only month when the market goes down more often than it goes up.”
S&P 500 September Sizing
September is not well received by investors. The S&P 500 has never had a more hostile month.
The S&P 500 fell an average of 0.5% in September dating back to 1950, according to Stock Trader’s Almanac. The year he went down was 38 and the year he went up was only 32. There is no worst month for stocks.
And even “good” September isn’t great, says Stovall. “September’s best returns rank in the bottom quarter of any month, but the deepest one-month drop is among the worst four,” he said. “Finally, the volatility this month has also been above average,” Stovall said.
But that doesn’t mean we haven’t found a place to make money in the S&P 500 yet.
Gambling for S&P 500 September Winners
If you think making money in stocks in September is a gamble, you’re not far off. Casino operator Caesars Entertainment consistently shines as the top stock for September.
Caesars stock has risen an average of 9.8% in September over the past five years. This easily beats the monthly gains of his S&P 500 stocks, which over the last five years he outperformed the S&P 500 in September. The S&P 500 itself has fallen an average of 0.9% over the past five Septembers.
The Caesars’ amazing ability to outperform the market in September has also happened in the last two years of tough months. Last September, Caesars’ stock rose his 10.5%, and the S&P 500 tumbled his 4.8% in the month, a stellar performance. Likewise, the company surged 22.4% in September 2020, beating the S&P 500’s 3.9% decline in the same month.
If there is a rally on the card, it is expired. Investors have pushed Caesars’ stock price down nearly 56% this year as he is expected to face a year of losses in 2022 as well, reaching $2.19 per share. Still, analysts believe the company will return to profitability in fiscal 2023.
top stocks to win in september
There are also some S&P 500 stocks that traditionally performed well in September, but have risen so far this year. Fertilizer maker Mosaic is a prime example.
The stock is already up nearly 33% so far this year. This is a good position to enter a strong month for stocks. Mosaic’s stock price has risen an average of 7.9% in September over the past five years. Additionally, the insurer’s MetLife has also consistently beaten the market in his September. The S&P 500 has dropped him 0.9%, but over the past five years he has risen 4% in September. MetLife shares are up 2% so far this year.
If there’s a silver lining to all of this, it’s that September has gotten less bad in recent years, says Stovall. Over the past 25 years, the S&P 500 has seen him rise 56% in September.
But September has a lot of grim history to remember.
Acquired S&P 500 shares in September
Over the past five years, all have outperformed the S&P 500 in one month
|Company||symbol||Average September stock price gains||sector|
|caesars entertainment||(CZR)||9.8%||Consumer discretion|
|O’Reilly Automotive||(Orly)||3.8%||Consumer discretion|
|home depot||(HD)||2.4%||Consumer discretion|