Investing in the stock market comes in all flavors and sizes. Typically, most investors focus on a firm's fundamentals, i.e. its income statement and balance sheet. So for instance, if a company's top and bottom line income grows significantly, then its shares also witness a corresponding increase in valuation. We don't have to look for this principle as the artificial intelligence stock NVIDIA Corporation (NASDAQ:NVDA)'s successive earnings reports have demonstrated triple digit growth on several fronts and its shares are at all time high levels.
Another investing approach is looking at the technical indicators to determine if any favorable market 'winds' are blowing to allow the investor to align their sails for smooth trading. These indicators include historic share price averages, the volume of shares traded, and metrics that determine if a stock is overbought or oversold. Another such indicator is seasonality, which checks to see if any stock market sectors deliver returns by the season.
When we talk about seasonality, then since spring has just started, it's best to see which Spring stocks are seeing interest from hedge funds. But before that, a look to see which stock market sectors perform well in spring. On this front, some research from CNBC and StockCharts can help guide us. Since the latter segregates stock indexes by their monthly performance, it makes sense to start our brief look at spring stock market performance by starting from it.
Taking a look at the flagship S&P 500, the tech heavy NASDAQ Composite, and the NYSE Primary, then the first three months of spring offer strong returns across all of these. Considering data for the twelve months of the year between 2005 to 2024, the S&P 500 closed higher in April 84% of the time - the highest for any month during the year. This is also the case for the NYSE's performance, with the same percentage for the same month.
Finally, when we look at how stocks on the NASDAQ Composite perform during spring months, then March and April saw the index close higher 68% of the time, each - for the second highest figure after its performance during July and November. Finally, spring's a good time for stocks especially when we consider that for the S&P and NYSE, May offers the third highest odds for a higher monthly close. Performance in May is particularly interesting when we remember a stock market 'proverb' that calls on investors to 'Sell in May and Go Away', referring to portfolio adjustments before the holidays. Combining this with the data, perhaps one reason why stocks do well in May is due to low liquidity also affecting prices through volatility.
The next step in our analysis of the best spring stocks is to see which sectors perform well. On this front, CNBC did some research and determined that the best spring stocks often include companies that operate in the financial services and energy industry. To quote the publication:
CNBC.com looked at stock performance over the past ten years and calculated the highest average gains during the spring months of March, April and May. Of all the stocks to achieve a gain of 20 percent or more, 27 percent were in the financial sector, while 21 percent were energy-oriented.
So, how are these sectors doing right now? Well, the finance industry remains one of the most dynamic ones in the market. Banks were given a scare earlier this year after the shares of New York Community Bancorp, Inc. (NYSE:NYCB) dropped after it reported a surprise loss for the fourth quarter and made allocations for potential turmoil in the commercial real estate industry. The real estate sector's troubles have been exacerbated by record high interest rates, which also led to the fall of several U.S. banks during last year's regional banking crisis in the U.S.
So, with spring with us, we decided to take a look at some top spring stocks to buy.
15 Best Spring Stocks To Buy Now
Our Methodology
To make our list of the best spring stocks, we picked out the financial services and energy stocks with the highest number of hedge fund investors during Q4 2023.
For these best spring stocks, we used hedge fund sentiment. Hedge funds' top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That's why we pay very close attention to this often-ignored indicator.
Occidental Petroleum Corporation (NYSE:OXY) is an American oil and gas exploration and production firm headquartered in Houston, Texas. The firm is ready to start the spring stock season on a strong note by reporting its Q4 2023 earnings during the first week of May. Analysts have penned an EPS estimate of 66 cents for Occidental Petroleum Corporation (NYSE:OXY)'s fourth quarter earnings.
During the same quarter, 66 out of the 933 hedge funds tracked by Insider Monkey were Occidental Petroleum Corporation (NYSE:OXY)'s shareholders. Warren Buffett's Berkshire Hathaway owned the biggest stake which was worth $14.5 billion.
The Goldman Sachs Group, Inc. (NYSE:GS) is one of the biggest investment banks in the world. As it divests away from its ill fated entry into consumer banking, February 2024 has been a busy month for The Goldman Sachs Group, Inc. (NYSE:GS) and has seen the bank expand its presence in Asia through a $1 billion investment fund and announce a new private equity round for its fund.
As of Q4 2023 end, 69 out of the 933 hedge funds covered by Insider Monkey's research had invested in the firm. The largest The Goldman Sachs Group, Inc. (NYSE:GS) shareholder is Ken Fisher's Fisher Asset Management due to its $2.1 billion investment.
Chevron Corporation (NYSE:CVX) is an American oil and gas super major. The firm's $53 billion acquisition of Hess Corp made headlines last year, and its shares dropped in February after Chevron Corporation (NYSE:CVX) warned that the deal might fall through if it cannot secure clearance from rival Exxon Mobile Corporation (NYSE:XOM).
By the end of last year's fourth quarter, 71 out of the 933 hedge funds part of Insider Monkey's database were Chevron Corporation (NYSE:CVX)'s shareholders. Warren Buffett's Berkshire Hathaway owned the biggest stake which was worth $18.8 billion.
Wells Fargo & Company (NYSE:WFC) is one of the biggest domestic banks in the U.S. February 2024 is an important month for the firm since after the recent hype surrounding a reinvigorated mergers and acquisitions season this year, Wells Fargo & Company (NYSE:WFC) appointed a new vice chair with decades of experience in this segment of the finance industry.
Insider Monkey scoured through 933 hedge fund portfolios for 2023's December quarter and found that 72 had bought and owned the firm's shares. Wells Fargo & Company (NYSE:WFC)'s largest investor in our database is Peter Rathjens, Bruce Clarke, and John Campbell's Arrowstreet Capital due to its $1.5 billion investment.
Pioneer Natural Resources Company (NYSE:PXD) is a mid sized oil and gas company headquartered in Irving, Texas. It's become quite an important stock in the energy sector lately, as after Chevron announced that its deal for Hess Corporation might fall through, Pioneer Natural Resources Company (NYSE:PXD)'s multi billion dollar acquisition by Exxon can create fireworks before the final ts are crossed.
As of Q4 2023 end, 76 out of th 933 hedge funds part of Insider Monkey's database had held Pioneer Natural Resources Company (NYSE:PXD)'s shares to touch highs last seen in 2016. Mathew Hallbower's Pentwater Capital Management owned the biggest stake which was worth $1.3 billion.
Apollo Global Management, Inc. (NYSE:APO) is one of the biggest asset management companies in the world. As investors rush hand over fist into AI stocks, its chief economist posted a rather interesting graph that pointed out that the "top 10 companies in the S&P 500 today are more overvalued than the top 10 companies were during the tech bubble in the mid-1990s."
After digging through 933 hedge fund holdings for last year's fourth quarter, Insider Monkey found that 77 were Apollo Global Management, Inc. (NYSE:APO)'s investors.
S&P Global Inc. (NYSE:SPGI) is one of the most well known financial services companies in the world courtesy of its flagship S&P500 index and economic coverage. Its shares are rated Strong Buy on average, and the average analyst share price target is $489.16.
By the end of December 2023, 82 out of the 933 hedge funds profiled by Insider Monkey had bought the firm's shares. S&P Global Inc. (NYSE:SPGI)'s largest hedge fund shareholder is Chris Hohn's TCI Fund Management as it owns 9 million shares that are worth $3.9 billion.
Exxon Mobil Corporation (NYSE:XOM) is the last energy stock on our list of the best spring stocks to buy. As rival Chevron warned that its multi billion dollar expansion into Guyana might be blocked by Exxon, the firm chimed in as well and added that it will consider blocking the deal.
Insider Monkey's fourth quarter of 2023 survey covering 933 hedge funds revealed 85 Exxon Mobil Corporation (NYSE:XOM) shareholders. Ken Fisher's Fisher Asset Management was the biggest investor due to its $1.3 billion stake.
PayPal Holdings, Inc. (NASDAQ:PYPL) is the first new age financial technology stock on our list of the best spring stocks. While its shares are down 2% year to date, there might be huge catalysts ahead if we believe recent figures from AltIndex that suggest PayPal Holdings, Inc. (NASDAQ:PYPL)'s payment volume stood at a whopping $1.5 trillion in 2023 for a new all time record.
After scouring through 933 hedge fund portfolios for last year's December quarter, Insider Monkey found that 87 had bought the payments company's shares. PayPal Holdings, Inc. (NASDAQ:PYPL)'s largest hedge fund stakeholder is Josh Overdeck and David Siegel's Two Sigma Advisors as it has invested $460 million in the company.
Citigroup Inc. (NYSE:C) is another major American bank headquartered in New York City. Its decision to hire a multi decade JPMorgan deal making guru in February won laurels from analysts, with CFRA upgrading the shares to Hold from Buy and increasing the share price target to $65 from $54.
As of Q4 2023 end, 87 out of the 933 hedge funds covered by Insider Monkey's research were Citigroup Inc. (NYSE:C)'s investors. Warren Buffett's Berkshire Hathaway owned the biggest stake which was worth $2.8 billion.
Bank of America Corporation (NYSE:BAC) is one of the biggest domestic banks in the U.S. The bank has been doing well on the financial front as of late by having beaten analyst EPS estimates in all four of its latest quarters. It chimed in on the AI wave in February by pointing out that while NVIDIA's shares have delivered a lot of returns, investors can make more money through call options by capitalizing on share price volatility.
Insider Monkey dug through 933 hedge fund portfolios for 2023's December quarter and found that 96 had invested in the bank. Bank of America Corporation (NYSE:BAC)'s biggest investor among these is none other than Warren Buffett's Berkshire Hathaway who owns a $34.7 billion stake.
JPMorgan Chase & Co. (NYSE:JPM) is the American banking behemoth headquartered in New York City. With inflation and economic growth being key investor concerns for the stock market this year, its CEO Jamie Dimon was out with a rather dire viewpoint in February 2024 when he warned that the U.S. might be heading towards low growth and high inflation, called Stagflation in economics.
As of December 2023 end, 103 out of the 933 hedge funds covered by Insider Monkey's research were the firm's shareholders. JPMorgan Chase & Co. (NYSE:JPM)'s largest hedge fund shareholder is Ken Fisher's Fisher Asset Management as it owns $2 billion worth of shares.
Berkshire Hathaway Inc. (NYSE:BRK-B) is the investment holding company headed by Warren Buffett. 2024 is a historic year for the firm, as after Mr. Buffett's close business partner and friend Charlie Munger passed away last year, he paid tribute to Mr. Munger in Berkshire Hathaway Inc. (NYSE:BRK-B)'s latest investor letter.
During 2023's fourth and final quarter, 117 out of the 933 hedge funds profiled by Insider Monkey held a stake in the firm. Berkshire Hathaway Inc. (NYSE:BRK-B)'s biggest investor among these is Michael Larson's Bill & Melinda Gates Foundation Trust courtesy of its $7.1 billion stake.
Mastercard Incorporated (NYSE:MA) is an American financial technology firm known for its payment platform and credit and debit cards. It's one of the strongest rated stocks on our list, as the shares are rated Strong Buy on average. The average analyst share price target for Mastercard Incorporated (NYSE:MA) is $505.46.
During last year's December quarter, 141 out of the 933 hedge funds tracked by Insider Monkey were Mastercard Incorporated (NYSE:MA)'s shareholders. Charles Akre's Akre Capital Management owned the largest stake which was worth $2.1 billion.
Visa Inc. (NYSE:V) is Mastercard's primary rival along with American Express in the payments platform industry. And like Mastercard, Capital One's $5.3 billion bid to acquire Discover stands to disrupt Visa Inc. (NYSE:V)'s strong position in the market by creating a large entity capable of competing with it. To wit, the deal has divided observers, as while JPMorgan's Jamie Dimon wants to let them compete, Democrats have urged the Biden Administration to block the deal.
As of Q4 2023 end, 162 out of the 933 hedge funds profiled by Insider Monkey had bought and owned the firm's shares. Visa Inc. (NYSE:V)'s biggest hedge fund investor is Chris Hohn's TCI Fund Management through its $4.3 billion investment.
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