You’ve undoubtedly heard the adage, “Sell in May and go away.” I’ve never been a fan of that school of thought. While other investors may look to dump their stocks, I think this is an ideal time to look for stocks to buy.
Why?
First of all, market experts are mixed on the whole issue of “sell in May and go away.” Some experts point to historical data that the market gains an average of only 2% from May to October.
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By contrast, the market earns 7% from November to April, but the issue is far from settled one way or the other.
Personally, I think it’s a bunch of hogwash. I would much rather be in the market to buy stocks in May, even if the market is indeed starting a brief period of underperformance.
Finding the best A-rated stocks to buy now gives you a leg up on growing your portfolio over the long term. After all, you can only take advantage of the miracle of compound interest if you’re holding on to a stock for the long term.
If you wait until November to buy, you lose several months of returns.
The Portfolio Grader is an excellent tool for finding the best A-rated stocks to buy. Here are seven that get top marks in May.
Impinj | $87.72 | |
Sigma Lithium | $33.37 | |
PDD Holdings | $63.52 | |
Kensington Capital Acquisition Corp. V | $10.48 | |
Enphase Energy | $155.42 | |
Assertio Therapeutics | $5.94 | |
Eli Lilly | $431.19 |
Impinj (PI)
Source: whiteMocca / Shutterstock
Technology company Impinj (NASDAQ:PI) works deeply with the Internet of Things.
Impinj creates tag chips, reader chips and software products that all help products connect to the internet through radio-frequency identification systems.
Impinj is having an up-and-down year so far. The company raised its first-quarter guidance from a range of $71.5 million to $73.5 million up to at least $76 million – and then blew that out of the water by posting $85.9 million.
The company rattled investors in April by issuing somewhat weak guidance for Q2. It said it would likely have adjusted EPS of 31 cents per share, and revenues of $85.5 million. But Wall Street was looking for $88.4 million in revenue and EPS of 40 cents per share.
As a result, PI stock fell 40% in late April. But I’m not deterred. I think PI is even more attractive at this price point, and the market will come to terms with what is undoubtedly an overreaction from fearful investors. This clearly is one of the best stocks to buy this month.
PI stock has an “A” rating in the Portfolio Grader.
Sigma Lithium (SGML)
Source: Shutterstock
Lithium stocks have gotten attention recently because it’s a crucial component for electric vehicles, smartphones, laptops and other devices powered by lithium batteries.
Lithium is extracted from brine through evaporation ponds, but mining lithium comes at a steep price. It takes roughly 2.2 million liters of water to produce a single ton of lithium.
Sigma Lithium (NASDAQ:SGML) is trying to address this using 100% recycled water and clean energy technology at its Grota do Cirilo project in Brazil. The company started production there in April after getting the OK from the Brazilian government to sell and export lithium.
Sigma Lithium is expected to ship its first batch, roughly 15,000 metric tons,this month and reach 270,000 metric tons of annual production.
Sigma is already getting some interest from EV producers as a possible buyout target.
SGML stock has an “A” rating in the Portfolio Grader.
PDD Holdings (PDD)
Source: madamF / Shutterstock.com
As the corporate parent of Chinese e-commerce company Pinduoduo, PDD Holdings (NASDAQ:PDD) sits in an enviable space as one of the stocks to buy this month. China’s e-commerce market has a projected market volume of $1.48 billion this year.
China’s been a difficult market in recent years, as extended Covid-19 shutdowns and U.S. policy toward Beijing on tariffs had an impact. U.S. regulators also have been looking critically at Chinese stocks.
But China’s economy is improving, with the GDP showing 4.5% growth in the first quarter, which was better than the 3% GDP growth in 2022.
Pinduoduo focuses primarily on the agricultural industry, allowing small-scale farmers to sell directly to consumers. Fourth-quarter revenues of $39.82 billion were up 46% from a year ago.
PDD stock is down more than 20% this year but seems to be retrenching for another higher run. On a year-over-year basis, the stock is still up 43% from a year ago.
PDD stock has an “A” rating in the Portfolio Grader.
Kensington Capital Acquisition Corp. V (KCGI)
Source: Dmitry Demidovich/ShutterStock.com
It’s perfectly reasonable to be skeptical of SPAC deals. Special purpose acquisition companies were all the rage a couple of years ago as a preferred way to take a company public. But not all these deals are good, so it takes some due diligence to ensure your SPAC deal doesn’t end up a dud.
Kensington Capital Acquisition Corp. V (NYSE:KCGI) has a $524 million deal to merge with Arrival (NASDAQ:ARVL), an EV manufacturer that trades on the Nasdaq composite. The combined company would trade under the ARVL ticker when the merger is complete.
Arrival, a U.K. company planning to build a manufacturing plant in North Carolina, focuses on serving the last-mile delivery market. As e-commerce grows in popularity in the U.S., major delivery companies struggle to quickly and efficiently get products from warehouses to consumers’ homes.
With a market value of $131.5 billion in 2021, the global last-mile delivery market is expected to reach a market value of $288.9 billion by 2031, according to Allied Market Research.
Arrival says its merger with KCGI will allow it to bring its EV vans to the U.S. to serve the last-mile delivery market. KCGI stock is an exciting way to get into this market at a low price, and it has an “A” rating in the Portfolio Grader.
Enphase Energy (ENPH)
Source: IgorGolovniov / Shutterstock.com
Enphase Energy (NASDAQ:ENPH) is possibly one of the best alternative energy stocks to buy now. It makes microinverter-based solar storage systems and is in an excellent position to capitalize on clean energy incentives currently being offered by Washington.
The company’s solar storage systems include solar micro-inverters, battery energy storage and EV charging stations. They allow residential customers to harvest and store solar power for their homes—ideally, helping consumers avoid rolling power blackouts and the reliance on fossil fuels.
Customers can use Enphase’s app to help them control their solar power systems by monitoring how much power their home uses and how much stored energy it has to sell back to utility providers for cash or a credit on their utility bills.
Solar stocks are under pressure right now because of higher interest rates. But ENPH still has an “A” rating in the Portfolio Grader.
Assertio Therapeutics (ASRT)
Source: Billion Photos / Shutterstock
Assertio Therapeutics (NASDAQ:ASRT) is the first of two pharmaceutical plays on this list of A-rated stocks to buy. The Illinois company makes prescription drugs for pain management, neurology and inflammation.
Its top drugs include Oxrexup, a treatment for rheumatoid arthritis; Cambia, which is for migraine relief; and Indocin, a medication used by patients who suffer from arthritis and gout.
Assertio recently announced plans to buy Spectrum Pharmaceuticals (NASDAQ:SPPI) in an all-stock transaction expected to close in the third quarter of this year.
Spectrum has one drug, Rolvedon, which is approved to treat chemotherapy’s side effects in cancer patients. Another potential drug, Poziotinib, is in advanced development to treat non-small cell lung cancer.
ASRT stock is up 35% this year, with first-quarter results expected in early May. It has an “A” rating in the Portfolio Grader.
Eli Lilly (LLY)
Source: shutterstock.com/Michael Vi
Eli Lilly (NYSE:LLY) is a large-cap pharma stock that’s already well-known. But it could be on the verge of a huge payday.
Lilly is seeking approval from the Food and Drug Administration to sell its type 2 diabetes drug tirzepatide, which is sold under the brand name Mounjaro, as a treatment for obesity. Lilly says that it’s expecting approval of the drug by the end of the year.
It announced top-line results of a Phase 3 study showing nearly a 16% overall weight loss among patients with type 2 diabetes and obesity. The FDA previously granted a fast-track designation to study tirzepatide as an obesity treatment.
Mounjaro is expected to bring $25 billion in annual revenue to Lilly if it’s approved to treat obesity. That would nearly double the annual revenue of $28.5 billion LLY saw in 2022.
LLY stock has an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier held ENPH. He did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
On the date of publication, the InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.
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As someone deeply entrenched in financial markets and stock analysis, it's evident that the adage "Sell in May and go away" is a perennial topic of debate among investors. While the author of this article expresses skepticism toward this strategy, citing mixed opinions from market experts and historical data, I concur with the notion that timing the market based on seasonal trends can be a dubious strategy. The article suggests that May is not a time to sell but rather an opportune moment to identify stocks for purchase.
The article introduces the Portfolio Grader as a tool for finding A-rated stocks, indicating a preference for fundamentally strong companies. Now, let's delve into the information provided about each of the seven A-rated stocks recommended for May 2023:
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Impinj (PI):
- PI is a technology company specializing in the Internet of Things (IoT).
- Its products include tag chips, reader chips, and software for connecting products to the internet through radio-frequency identification systems (RFID).
- Despite a volatile year, the company exceeded Q1 guidance, but weak Q2 guidance led to a significant stock drop. The author remains optimistic about its long-term prospects.
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Sigma Lithium (SGML):
- Sigma Lithium is involved in lithium production, a crucial component for electric vehicles and various electronic devices.
- The company stands out by using 100% recycled water and clean energy technology in its lithium extraction process.
- SGML is expected to ship its first batch of lithium this month and is seen as a potential buyout target.
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PDD Holdings (PDD):
- PDD Holdings is the corporate parent of Chinese e-commerce company Pinduoduo.
- Positioned in China's growing e-commerce market, Pinduoduo focuses on the agricultural industry, connecting small-scale farmers directly to consumers.
- Despite challenges in the Chinese market, PDD stock is considered a buy, given China's improving economy.
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Kensington Capital Acquisition Corp. V (KCGI):
- KCGI is a special purpose acquisition company (SPAC) with a pending merger deal with Arrival, an EV manufacturer.
- Arrival focuses on serving the last-mile delivery market, aiming to bring its EV vans to the U.S.
- The author sees KCGI as an exciting entry point into the EV market, emphasizing its potential in the growing last-mile delivery sector.
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Enphase Energy (ENPH):
- ENPH is highlighted as one of the best alternative energy stocks.
- The company specializes in microinverter-based solar storage systems, well-positioned to capitalize on clean energy incentives.
- Despite pressure on solar stocks due to higher interest rates, ENPH maintains an A rating in the Portfolio Grader.
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Assertio Therapeutics (ASRT):
- ASRT is a pharmaceutical company focusing on prescription drugs for pain management, neurology, and inflammation.
- The company announced plans to acquire Spectrum Pharmaceuticals, expanding its drug portfolio.
- ASRT stock is up, and it receives an A rating, reflecting confidence in its performance.
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Eli Lilly (LLY):
- LLY is a large-cap pharma stock seeking FDA approval for its type 2 diabetes drug tirzepatide as an obesity treatment.
- Positive Phase 3 study results show significant weight loss potential, with expectations of substantial revenue if approved.
- LLY stock is deemed a buy with an A rating in the Portfolio Grader.
In summary, the article provides a comprehensive overview of seven A-rated stocks across various sectors, emphasizing the importance of fundamental analysis and a long-term investment approach during the month of May.
