What Stocks Go Up At This Time of Year?

Some stocks have unusual trends at different times of the year. Although share prices rising or falling theoretically have the same odds as a coin toss, unusual seasonal patterns often defy theory. A select number of stocks tend to exhibit similar share price behavior more often than not during these months, and by large amounts that can’t easily be explained away.

In spring time, a swimming pool manufacturer may rise more often than not in anticipation of heightened summer demand and an expected boost in revenues. Some other stocks, however, have trends that can’t as easily be understood yet repeat time after time.

Here, we take a look at some stocks that have a tendency to rise over the summer. We present the facts and data, and theorize as to why they rise, though the precise reason is less important than the repeated historical pattern.

First on the list is Meta.

META Has Risen by 10.58% Over Next 13 Weeks

During the summer months, Meta tends to rise well above market averages, by a full 10.58% over the next 13 weeks with a historical track record of 75%, meaning that in 3 out of every 4 years as a publicly traded company that trend is evident.

There are a few reasons why Meta may have such a strong record at this time of year. For one, Meta’s Q3 earnings have historically beaten analyst expectations in several years. As investors spot the pattern, they often accumulate positions ahead of time in anticipation of yet another earnings beat.

Ad spending also undergoes seasonal shifts, and the second six months of the year is accompanied by spikes that benefit Meta, particularly as back-to-school, Thanksgiving and Holiday trends all converge.

A final reason is the expectation of new product launches that typically are announced in September and are aimed at boosting user experience and engagement that ultimately support higher ad revenues.

ETSY Rose 25.59% Over Next 10 Weeks

If you thought Meta’s seasonal trend was strong, Etsy emphatically beats it with a 25.59% over the next 10 weeks and a 77.78% historical accuracy rate of so doing.

The reasons for Etsy rising over the summer are manifold. For one, summer is a time of increased social activities, such as weddings, parties, and vacations, which in turn drives demand for unique, handmade, and customized products.

During the wedding season, consumers often turn to Etsy for personalized wedding favors, decorations, and gifts. So too do summer parties and outdoor events lead to increased sales of custom items.

Summer also coincides with a time when consumers have more disposable income following tax rebates or refunds, as well as work bonuses, holiday pay, and more vacation time. With discretionary income rising on non-essential items, Etsy enjoys a spike revenues as higher-priced items like handcrafted jewelry, home décor, and fashion items fly off the shelves so to speak.

Lastly, Etsy has historically done a good job rolling out new features and enhancements to make the shopping experience more enjoyable, boost user engagement and ramp up sales. Those improvements also lead to higher repeat purchases and customer loyalty, all of which tend to support higher share prices.

PANW Rose 8.95% Over Next 13 Weeks

Although not as impressive by percentage level as the prior two examples, Palo Alto Networks also has a pretty strong track record during the next few months with a historical gain of 8.95% on average in 81% of the years it has been publicly traded.

One primary driver of revenues during these months stems from corporate and government budgets for cybersecurity. Major spending decisions are often made in the second half of the year, aligning with the beginning of the fiscal year for many organizations.

A lot of enterprise contracts and service agreements are up for renewal or upgrade around mid-year, which has a positive impact on PANW’s revenue and share price performance.

In anticipation of better earnings from these contract wins, investors often anticipate positive results and build larger positions that drive the share price higher.

A further factor that can support Palo Alto Networks is from window dressing whereby institutional investors increase their holdings in strong-performing stocks like PANW ahead of the fiscal year-end, resulting in upward price pressure.

Though perhaps not a major contributor, it’s also worth noting that major cybersecurity industry conferences occur during the summer months, such as Black Hat USA. These tend to result in new partnerships and collaborations that further support revenues and boost investor sentiment.

Lastly, a broader sector rotation typically accompanies the summer months with investors seeking out higher risk growth plays in an effort to generate alpha.

What Stocks Go Up During the Summer?

Stocks like Meta, Etsy and Palo Alto Networks have strong track records of rising during the summer months as discretionary consumer spending increases resulting in higher revenues.

Meta tends to benefit from heightened ad revenues that accompany increases in consumer spending as corporate clients look to capitalize on selling products to vacation travelers, and so forth.

Similarly, Etsy enjoys heightened interest from sales of unique and hand-crafted good that buyers snap up to give as wedding presents and other social summer events.

Palo Alto Networks has tailwinds that stem from budget cycles of corporate and government clients in addition to industry conferences that often foster new revenue-generating partnerships and collaborations.

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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.