November already is known as the S&P 500's second-best month of the year. And this November, some stocks have even more power to push them up.
Eleven stocks in the S&P 500, including Enphase Energy, Bath & Body Works and Signature Bank, consistently outperform during an already strong month of November, says an Investor's Business Daily analysis at data from S&P Global Market Intelligence and MarketSmith. All these stocks outperformed the S&P 500 in each of the past five Novembers. And they all rose an average of 6.1%, or more, on average during those periods.
Investors are eagerly awaiting an all's clear sign to jump back into S&P 500 stocks. And if history is a guide, they might get it in November. But right now, only gutsy investors are jumping this soon. "U.S. stocks are finishing October on a down note as Wall Street braces for any signs from the Fed that they are near the end of their tightening cycle," said Edward Moya of Oanda.
S&P 500 Rocks In November
Beating the S&P 500 in November isn't an easy feat. It's already a traditionally a strong period for stocks.
The S&P 500 rose an average of 1.7% during the month going back to 1950, says "Stock Trader's Almanac." And it's not just a outlier. Traditionally, November kicks off what's known as the "Best six months" of the year, says the almanac. The months from November through April are the top months for stocks going back to 1950, the almanac says. During the period, the market rose more than 7.5% on average, far topping the 0.8% average gain in the other six months of the year.
But this year, November has additional pluses going for it. For one thing, the S&P 500 tends to rise even more in November, 2.6%, when it's a midterm election year. And what's more, lately November has been even stronger than in the past, says Ryan Detrick, analyst at Carson Group. November is actually the No. 1 month of the year in the past 10 years, he says.
Detrick also finds that a record-topping month like the S&P 500 enjoyed in October is usually followed up with additional gains. When the Dow Jones Industrial Average rose 10% or more in a month, as in October 2022, the market rises nearly 16% in the following 12 months on average.
And even more recently, November is even more of a winner. The S&P 500 gained in four of the past five Novembers by an average of 3.6%. Last November was the only time in the past five years the S&P 500 fell in the month. And then, it barely fell 0.8%.
Which S&P 500 Stocks Thrive In November
As if investors needed any more reasons to buy shares of well-run solar firm, Enphase. Shares of the information technology stock are up more than 67% this year as investors eagerly grab any companies showing growth.
But the stock really turns it on in November. Enphase shares rocketed more than 33% on average in the past five years. That blows away the S&P 500's 3.6% average gain in November the past five years. And Enphase's stock hasn't fallen even once in November in the past five years. Investors are betting on the company having a banner year. Its adjusted per share profit is seen rising more than 80% to 4.36. Enphase is expected to report 2022 results on Feb. 8.
Bath & Body Works, which sometimes flirts with being a meme stock, steps up in November, too. It has gained an average of 14.9% in November the past five years. Its stock hasn't fallen during the month since 2016. Bath & Body Works is more of a recovery story this time. Analysts think its adjusted profit per share will drop by more than a third this year. But profit is expected to grow annually until finally surpassing 2022's profitability in 2026. Shares are down 52% this year, but investors might decide they're sufficiently on sale.
And showing how financials are becoming more important in the S&P 500, Signature Bank is a standout in November, historically. Sure, shares are down 50% this year so far, but it just doesn't miss in November. It's risen 12.5% in the month of November going back five years and never fell in the month even once.
It's certainly possible high hopes for stocks in November won't materialize. But with the S&P 500 still down 19% this year, any good news in November would be a welcome change. And it's certainly the time of the year for it.
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Top S&P 500 Stocks In November
All topped the S&P 500 in November of each of the past five years
| Company | Symbol | Sector | Average stock gain in November |
|---|---|---|---|
| Enphase Energy | Information Technology | 33.6% | |
| Bath & Body Works | Consumer Discretionary | 14.9% | |
| Signature Bank | Financials | 12.5% | |
| AMETEK | Industrials | 9.8% | |
| ANSYS | Information Technology | 9.3% | |
| D.R. Horton | Consumer Discretionary | 9.1% | |
| Broadcom | Information Technology | 7.7% | |
| Estée Lauder | Consumer Staples | 6.9% | |
| IDEX | Industrials | 6.6% | |
| TE Connectivity | Information Technology | 6.5% | |
| Brown-Forman | Consumer Staples | 6.1% |
Sources: IBD, S&P Global Market Intelligence, over past five years
Follow Matt Krantz on Twitter @mattkrantz
