In this article, we discuss the 10 best seasonal stocks to buy according to hedge funds.
Seasonal patterns in the stock market refer to recurring trends that occur at specific times of the year. These patterns can influence investment strategies, as certain sectors or stocks tend to perform better during particular periods. Understanding these seasonal trends can aid investors in making informed decisions. One well-known seasonal phenomenon is the January Effect, which suggests that stock prices, particularly those of small-cap companies, tend to rise in January more than in any other month. This pattern has been observed historically, though its impact can vary from year to year. Different sectors exhibit unique seasonal trends. For instance, the technology sector often experiences strength in the fourth quarter, coinciding with increased consumer spending during the holiday season. Conversely, the energy sector may see heightened activity during the summer months due to increased travel and energy consumption.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Historically, certain months have demonstrated consistent performance trends. For example, September has been the most challenging month for stock performance, with the S&P 500 Index averaging a return of negative 0.7% since 1950. The index has finished September on the positive side less than half of the time, underscoring the volatile terrain that investors have historically traversed during this month. As of early February 2025, the market sentiment in the US has been dampened by ongoing concerns regarding tariffs with major US trading partners. Recent announcements indicate that existing tariffs may remain in place for an extended period, adding to market instability. Additionally, China has imposed tariffs on various US products and initiated an antitrust investigation into Google, with potential similar actions against Apple’s App Store.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
The stocks mentioned below in the list are the companies that tend to perform better at a certain time in a year. They are also popular among hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Best Seasonal Stocks To Buy According to Hedge Funds
10. 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS)
Number of Hedge Fund Holders: 10
1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS) markets gifts for different occasions. In the report for the second fiscal quarter of 2025, the company generated revenues of $775.5 million and net income of $64.3 million, signaling positive revenue growth and profitability. Cheryl’s Cookies, one of the most prominent brands of the company, has teamed up with Frank’s RedHot Sauce to launch a limited edition of the Frank’s RedHot Buttercream-Frosted Cookie. This strategic move would position the company as creative and trend-conscious, potentially leading to future collaborations and increased market differentiation.
9. Leslie’s, Inc. (NASDAQ:LESL)
Number of Hedge Fund Holders: 25
Leslie’s, Inc. (NASDAQ:LESL) is the largest retailer of swimming pool supplies and related products. In the earnings of the fourth fiscal quarter of 2024, the company reported sales of $397.9 million in the fourth quarter and $1,330.1 million in fiscal 2024, which reflects consistent growth and strong market demand. The company is also planning to open 15 new stores located in different places like Texas, California, New York, Arizona, Nevada, Florida, and Washington. This strategic expansion can drive revenue growth, increase market share, and enhance brand presence.
8. Nutrien Ltd. (NYSE:NTR)
Number of Hedge Fund Holders: 33
Nutrien Ltd. (NYSE:NTR) is a fertilizer manufacturing company that produces and supplies fertilizers such as potash, nitrogen, phosphate and ammonium sulfate. In earnings for the third quarter of 2024, the company reported net earnings of $25 million ($0.04 diluted net earnings per share), indicating stable financial performance. On January 29, Nutrien’s Trinidad nitrogen facility completed two major turnarounds at its urea and ammonia plants in the previous year, investing around $130 million to enhance operational efficiency and extend the plants’ lifespan. These turnarounds involved key upgrades, such as replacing the stripper in the urea plant and the primary reformer internals and catalyst in the ammonia plant.
7. The Toro Company (NYSE:TTC)
Number of Hedge Fund Holders: 33
The Toro Company (NYSE:TTC) is a provider of outdoor environment products and related services. In the earnings of the fourth fiscal quarter, the company reported professional segment earnings of $638.9 million, increasing 25.5% compared with $509.1 million in the prior fiscal year. As a percentage of net sales, earnings rose to 18%, up from 13.9% last year. This growth was mainly due to lower non-cash impairment charges compared to the prior year, productivity improvements, and product mix. In December last year, the company declared a regular quarterly cash dividend of $0.38 per share, an increase over the previous quarter’s cash dividend of $0.36 per share. This marks the 16th consecutive year that the company has increased its dividend.
6. Vail Resorts, Inc. (NYSE:MTN)
Number of Hedge Fund Holders: 38
Vail Resorts, Inc. (NYSE:MTN) is a premier mountain resort company and a leader in luxury, destination-based travel at iconic locations. In earnings for the first fiscal quarter, the firm reported a net loss of $4.61 per share for the quarter. While this represents a loss, it was smaller than analysts had anticipated. The company generated revenue of $260.3 million during the quarter, surpassing market expectations. There was a 2% decline in the number of season passes sold for the 2024/25 ski season compared to the previous year. Despite the decrease in units sold, revenue from season pass sales increased by 4%, primarily due to price adjustments. Vail Resorts has also announced plans to invest up to $254 million in resort and real estate developments in 2025. These investments are aimed at enhancing guest experiences and include projects such as new lift installations, terrain expansions, and upgrades to existing facilities.
5. The Gap, Inc. (NYSE:GAP)
Number of Hedge Fund Holders: 39
The Gap, Inc. (NYSE:GAP) is a worldwide clothing and accessories retailer. In earnings for the third quarter of 2024, the company delivered net sales of $3.8 billion, an increase of 2% year-over-year, with comparable sales rising to 1%. The company reported a gross margin of 42.7% increase of 140 basis points versus last year’s gross margin, and the Merchandise margin increased by 90 basis points versus last year, primarily driven by improved inventory management. On January 27, Gap and Sean Wotherspoon announced an expanded partnership, bringing Gap’s iconic product archive directly to customers worldwide. GapVintage, globally sourced curations by Wotherspoon, will be available beginning February 2025.
4. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 46
MGM Resorts International (NYSE:MGM) is a hospitality and entertainment firm that runs several destination resorts. On January 17, MGM Grand Hotel & Casino revealed plans for a $300 million remodel, updating all 4,212 rooms and suites in its main tower. The transformation, which is slated for completion in December 2025, is set to enhance the overall guest experience with modern, sophisticated design elements inspired by the flair of the disco era. The remodeled rooms will be part of MGM Grand’s refreshed experience, alongside new dining and entertainment options set to launch later this year. In the earnings of the third quarter of 2024, the company reported a net income of $185 million compared to $161 million in the prior year’s quarter, reflecting strong financial performance and potential for higher shareholder returns.
3. Royal Caribbean Cruises Ltd (NYSE:RCL)
Number of Hedge Fund Holders: 52
Royal Caribbean Cruises Ltd (NYSE:RCL) operates as a cruise company worldwide. In the fourth-quarter earnings, the company achieved an adjusted EPS of $1.63, surpassing analysts’ expectations of $1.50. It also posted a 13% increase in revenue, reaching $3.8 billion. Looking ahead, it forecasts net yields to increase by 2.5% to 4.5%, reflecting confidence in sustained demand and operational efficiency. Royal Caribbean has recently announced plans to enter the river cruise market under the Celebrity Cruises brand. This expansion is set to launch in Europe, with bookings starting this year and the first of ten ships expected in 2027.
2. Expedia Group, Inc. (NASDAQ:EXPE)
Number of Hedge Fund Holders: 52
Expedia Group. Inc. (NASDAQ:EXPE) operates as an online travel company worldwide. The report for the third quarter revealed that the revenue from booked room nights increased by 9% compared to the prior year, with Brand Expedia growing at mid-teens. This highlights the company’s ability to capture a larger market share and suggests positive momentum in its core business. Global News Wire reported on February 3 that the company is also working on implementing digital transformation strategies, including the development of accelerators, incubators, and innovation programs. These initiatives aim to enhance technological capabilities and improve customer experiences across its platforms.
1. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 76
Starbucks Corporation (NASDAQ:SBUX) operates as a roaster, marketer, and retailer of specialty coffee worldwide. In earnings for the first fiscal quarter of 2025, the firm posted consolidated net revenues of $9.4 billion, flat to the prior year. Operating margin contracted 390 basis points year-over-year to 11.9%, primarily driven by deleverage and investments in support of Back to Starbucks, including store partner wages, benefits and hours, and the removal of the extra charge for non-dairy milk customizations. TD Cowen kept with a Buy rating on the stock following the report. Analyst Andrew Charles said the firm prioritized positive commentary on January trends and management expectations for FQ2 comparable sales over its lowered 2025 EPS estimate, due primarily to elevated restructuring G&A as a result of streamlining the support center.
While we acknowledge the potential of Starbucks Corporation (NASDAQ:SBUX) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a stock that is more promising than Starbucks Corporation (NASDAQ:SBUX) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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