Only 2 Stocks Outperform Every Fall, Offering Rare Moneymakers

Finding consistent S&P 500 stock winners in the fall isn’t easy. But it’s not impossible either.


Just two stocks in the S&P 500, consumer staples firm Lamb Weston (LW) and financial MarketAxess Holdings (MKTX), topped the index in each of the past three fall seasons, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

And underscoring just how tricky the season is for the S&P 500 — not a single company in the world’s most popular index bested the benchmark in each of the past five years. And that’s important to note as the fall just kicked off.

Get Ready For The Fall S&P 500 Slump

Investors have long known stocks get more unpredictable in the fall. And the numbers tell the story.

The market’s slump in the fall is worse than in any other season of the year, says “Stock Trader’s Almanac.” Stocks dropped 8.9%, on average, from the high of September down to the low during the fourth quarter. The slump from high to low is just 6.8% in the spring. And it’s just 8.5% in the summer and 7% in the winter.

And the worst seasonal showing in recent years, an 18.5% drop, hit the Dow Jones Industrial Average in the fall of 2019. It’s a similar story for the S&P 500, which plunged 17.5% in the fall of 2017, its worst fall showing in the past five years.

“The summer setback tends to be slightly outdone by the average correction in the fall,” says “Stock Trader’s Almanac. “Tax selling and portfolio cleaning are the usual explanations.”

But is it possible for stocks to outperform the S&P 500? It’s tough, but possible.

S&P Fall Gains Are Still Possible

Keep in mind, the fall season hasn’t been all that bad recently.

The S&P 500 gained 2.6%, on average, in the fall of the last five years. And it has gained 0.5% in the past three falls. The S&P 500 actually gained in four of the past five falls (only declining in the fall of 2017). Last year, the S&P 500 put up its best fall in a long time, gaining 11.4%. And prior to that, in the fall of 2019, the S&P 500 gained 7.7%.

And showing what’s possible, is the well-run bond trading firm MarketAxess. It topped the S&P 500 in the past four falls. And it has shot up more than 18.1%, on average, in the past three fall seasons. Some of the fall outperformance is due to some powerful late-year trends in MarketAxess’ business. The company’s revenue exploded 32% in the fourth quarter of 2020, its best growth in the past 12 months.

But the company might be hoping for an unexpected seasonal push this year. Analysts are calling for third quarter adjusted profit per share, to be reported next month (Oct. 20), to fall 5.6%. And fourth-quarter profit is seen falling 3%. Shares are down 26% this year.

Potatoes Grow In The Fall?

Another fall winner in the S&P 500 is frozen potato seller Lamb Weston. It also topped the S&P 500 in each of the past four fall seasons.

And that includes, too, an impressive 22.1% gain in the fall of 2017. That sure beats the S&P 500’s 17.5% drop in that period. And shares of Lamb Weston jumped 15.8%, on average, in the fall during the past three years.

Interestingly, analysts think Lamb Weston’s profit per share will also decline in the August-ended quarter, which is reported on Oct. 7. Analysts think profit during the quarter will drop by more than a third. And like MarketAxess, shares of Lamb Weston are down more than 20% this year.

But soon S&P 500 investors will find out if these stocks still come alive, again, in the fall.

Just Two Stocks Topped The S&P In The Fall For Three Years Strong

Company Ticker Stock % ch. in the fall of 2018 % ch. fall 2019 Fall 2020 % ch. Average fall % ch. (past three years) Sector Stock YTD % ch. Composite Rating
MarketAxess Holdings (MKTX) 12.6% 12.2% 29.4% 18.1% Financials -26.7% 38
Lamb Weston (LW) 9.9% 15.8% 21.9% 15.8% Consumer Staples -21.5% 27
S&P 500 -17.5% 7.7% 11.4% 0.5% 20.6%
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz


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