A month ago, we provided our EarningsBeats.com members a list of 20 companies that have historically performed well in the month of November. One of the stocks was TransDigm Group (TDG), and it only takes a quick glance at the seasonality chart to see why it was featured at the start of November:
The stock has risen 14 of 15 Novembers and averaged rising 6.6% per November. That's strong seasonal tailwinds. I guess we shouldn't be too surprised that TDG has risen 23.91% thus far in November 2020; the overall market has been exceptionally strong in November, and TDG has a propensity to move higher this time of year.
Let's fast forward to December. What stocks should we consider owning given their strong seasonal pattern in December? Well, I provided 20 more such stocks to our EarningsBeats.com members today. One of those stocks is Lululemon (LULU), which shows that December is one of its favorite months:
Similar to TDG's November strength, LULU averages 6.8% just during the month of December, which stretches over a 14-year period. That's not the only thing to like about LULU, however. After consolidating for several weeks, it has just broken out:
Its peer group has been exceptionally strong, but LULU has underperformed during its period of consolidation, which is typical. Now that we're seeing a breakout, however, I'd look for the seasonal and industry strength to help LULU outperform the benchmark S&P 500 over the next month.
If you'd like to see the list of my 20 favorite stocks for December, simply sign up using our fully-refundable, $7 30-day trial. CLICK HERE to get your subscription started.
Happy trading!
Tom Bowley, Chief Market Strategist, EarningsBeats.com
