3 Best Stocks For Year End

The divisive 2020 election is over, and the coronavirus pandemic is now part of daily life. You (and your portfolio) have seen the biggest stock market crash in our generation.

Some stocks that seemed like sure bets in 2019 (airlines, healthcare, retail, etc.) turned toxic, while others (Amazon, Microsoft, Zoom, etc) skyrocketed to historic high market capitalizations. So, what are the best stocks for year end?

Between the pandemic and the election, the 2020 holiday season will likely be a turbulent one. However, analyzing how stocks performed in prior years can shine light to help “guestimate” how some companies will do.

Here are three companies with compelling historical track records:

1.     AbbVie Inc BDR

2.     Berry Global Group Inc

3.     Lennox International Inc.

Each of these companies has proven in the past that they can gain value during the holiday season in prior years. Their previous seasonality trends mean they have a good chance of succeeding for investors this year too.

Here’s what you need to know about trading seasonal stocks.

AbbVie Benefits From Seasonal Ailments Like Flu

Abbvie Inc BDR (NYSE:ABBV) is a pharmaceutical company that very much benefits from seasonal illnesses, like allergies, the flu, and seasonal depression.

Its stock already shot up at the start of November. It’s not entirely clear why in past years the stock has performed so well during the holiday period but the likely reason is the same institutional investors repeat buying patterns time and again in anticipation of product demand spikes near year end.

This pattern occurred in various forms for the past five years, and the coronavirus resurgence is likely to fuel this effect this year, if the pattern holds true.

The stock already headed for $100 on election day after a short slum, giving it a $170 billion market cap, and AbbVie Inc has historically risen on average by 7.02 percent over the final eight weeks of the year.

It also rose six times out of the past six years over the subsequent eight weeks from early November to end of Decemer, giving it an astonishing 100 percent historical track record.

The Buy point was set at $101.38 by investment analysts back in September, and it could very well reach over $100 for the start of 2021.

One thing to keep in mind is the company’s patent on HIV medication Kaletra/Aluvia is being evaluated for possible efficacy against COVID-19. While it hasn’t proven useful in severe cases, it does give AbbVie a lead to funnel its R&D budget into for further vaccine developments.

Remember the 19 in COVID stands for 2019, but it’s still an evolved variant of previous SARS and MERS viral strains.

Any headway made in this sector will have big payoffs over the coming decades, as proven by the large sums of money given out to nearly ever other pharmaceutical giant but AbbVie.

Don’t let Operation Warp Speed’s cold shoulder effect your judgment too much though – the company still has plenty of products in its pipeline.

Berry Global Group Is Tied To Retail Sales

Berry Global Group Inc (NYSE:BERY) is an Indiana-based plastic manufacturer and marketer responsible for most of the designs you see for things like aerosol caps and plastic closures for retail packaging.

This means it tends to benefit from retail and other sales (like Black Friday and Cyber Monday), as brands and stores rush to replenish empty shelves as quick as possible.

The pandemic caused a massive dent in the company’s over $6 billion market cap, but it regained that by the end of the year.

The company’s stock price hovered around the $50 mark in the past eight weeks and its historic average rise over the next eight weeks, from early November through year end, is 11.63 percent (based on the past seven years).

It rose six out of those seven years in the eight-week period following, which gives is a historical probability of 85.71 percent.

Berry Global Group is expected by bullish analysts to continue this trend this year, and even if it doesn’t, it shouldn’t have a terrible 2021.

Its biggest looming threat is a global fall in consumer spending leading to less need for its products. It’s an important part of the supply chain, and it needs to continue focusing on sustainable plastic innovations as the world shifts to a greener business environment.

However, its client roster includes major firms like Sherwin-Williams, Coca-Cola (KO), Wal-Mart (WMT), Procter & Gamble (PG), Gillette, McDonald’s (MCD), and Burger King. These companies performed well through the recent crisis in spite of widespread municipal shutdown orders being issued.

So long as Happy Meals and spray paint remain popular among the world’s youth, Berry Global’s international reach and focused expertise keeps it in a great position to satisfy investors.

Lennox International

Lennox International Inc. (NYSE:LII) is a Texas-based heating, ventilation, and air conditioning (HVAC) company that services both consumer and commercial markets. Its climate control solutions are also used in refrigeration and cold storage, something that became a major need on the heels of the coronavirus pandemic.

Panic shopping caused supply chain issues that forced farmers and ranchers to dispose of raw products because there was nowhere to store it.

And the company has a great year-end history too.

Over the next eight weeks (from early Nov thru end of December), Lennox International Inc has risen an average 7.7 percent over the past 20 years of stock performance.

It rose in 15 out of those 20 years in the following eight-week period, which gives it a historical probability rating of 75 percent. This means its $11 billion market cap with stock prices heading toward $300 should be a good sign for bullish investors to jump on quick to maximize returns.

Next year, the removal of federal and state foreclosure and eviction moratoriums are sure to impact the company’s bottom line. But it’s not clear in what way – both the commercial and housing markets are going through changes as the government hustles to prop the economy up.

Lennox could experience massive growth now that it’s fully recovered from the impact of the pandemic.

Each of these stocks has potential, but real life doesn’t necessarily follow modeling. The election teaches that lesson at least every two years. 

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.