Buy in May and go away. That investing maxim suggests investors should walk away from the market in Spring and not return again till October. Historical data supports the May to October period as the worst-performing six-month period of the year.
Analysts at LPL Financial found that from 1950 on, the S&P 500 returned just 1.8% on average. But whatever you do, don’t invest in September! That month is the worst for the index with a long-term average return of negative 0.7%.
Of course, this is said facetiously. Investors should not be investing for a month or even six months. They should have a long-term mindset when buying stocks, aiming to hold them for three to five years at a minimum, though a decade or more is preferable. Or in the words of Warren Buffett, the best time to sell is never!
And that May-to-October investing bromide is really just for index investors. Stock pickers should look to buy shares whenever they offer discounts to their intrinsic value.
So even though it is May, the following three companies are some of the top stocks to invest $10,000 in today to enjoy long-lasting returns.
e.l.f. Beauty (ELF)
After nearly tripling in value last year and getting off to a rip-snorting start in 2024, cosmetics leader e.l.f. Beauty (NYSE:ELF) took a breather. Shares pulled back 27% from their all-time high in early March. The stock is still up 11% year-to-date (YTD). So, investors should view this as the pause that refreshes.
According to the recently released Taking Stock With Teens semi-annual survey, analysts at Piper Sandler say e.l.f. Beauty remains the No. 1 cosmetics brand in the country amongst female teens. The company widened its lead by 16 percentage points from last year and now commands a 38% share of the market. It is also one of the top 10 skincare brands and beauty destinations.
In addition, the survey showed the beauty market is a high priority. The average spend of $339 rose to its highest level since the spring of 2018. Analysts forecast e.l.f. Beauty will grow earnings at a compounded annual growth rate (CAGR) of 35% for the next five years. And, they have a $206 per share consensus one-year price target on the stock, implying 28% growth still to come. Thus, e.l.f. Beauty stock looks like an unstoppable force no matter what month it is.
Hudson Technologies (HDSN)
Green refrigerant specialist Hudson Technologies (NASDAQ:HDSN) doesn’t seem quite as exciting as a fast-growing cosmetics stock. But don’t let appearances fool you. This is not putting lipstick on a pig. Significant tailwinds are behind this company even if its stock price doesn’t yet reflect them. In fact, it’s good they don’t show up yet because that gives investors plenty of time to get in ahead of the crowd.
Call it the Law of Unintended Consequences. In 1994, the Environmental Protection Agency (EPA) banned chlorofluorocarbons (CFCs), a widely used class of refrigerants that were supposedly eating a hole in the world’s ozone later (turns out the threat was greatly exaggerated). In their place, hydrofluorocarbons (HFCs), were developed. Now the government wants them banned, too.
Four years ago the American Innovation and Manufacturing Act was passed, which phases out use of virgin HFCs. By 2038, they are to be reduced by 85%. These refrigerants are the sort used in home central air conditioning and car AC systems.
Hudson Technologies is the biggest player in the green refrigerant market with a 35% share. As the law cuts into available supplies, demand for reclaimed refrigerants will grow. HDSN stock is down 40% from the highs it hit. But don’t expect it to last. Refrigerants are going to get scarce very quickly, making Hudson Technologies will be the main beneficiary.
LVMH Moet Hennessy Louis Vuitton (LVMUY)
The hand of the government is also behind the recent decline in the stock of luxury goods maker LVMH Moet Hennessy Louis Vuitton (OTCMKTS:LVMUY). Even the rich have their limits on how long they can maintain their spending in the face of rising inflation and high interest rates.
Shares of the owner of Luis Vuitton, Dior, Tiffany and other prestigious high-fashion names saw its stock fall 13% following first-quarter earnings after growth rapidly pulled back in difficult economic conditions. Shares that had run up 17% higher to start the new year are now only up 3%.
Spending in the U.S., its largest market, fell from 8% growth to 2%, while the luxury house’s second biggest region Asia (minus Japan) went from a 14% gain last year to a 6% decline this year. Japan, though, went from strength to strength. Sales rose 34% last year and are up 32% so far in 2024.
Yet LVMH still has plenty of growth prospects ahead of it. The luxury goods house was going up against some difficult comparables from the year-ago period, which was its first post-pandemic-free quarter. It will likely have a few more tough comparisons to get through but should resume its growth trajectory once it laps them.
On the date of publication, Rich Duprey held a LONG position in LVMUY stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.