Transportation industry is doing incredibly well right now. This one had a huge push over the last few days and is starting to outperform the market. The period of seasonal strength for transportation stocks predominantly come to an end when industrial stocks come to an end, which is the beginning of May. A good trade during the summertime is to actually Short some of these things. July through to October is the weakest time for these transportation stocks. He would be looking to take profits here.
This is your classic defensive play. A consumer staples company that has a low PE of about 13 as opposed to the market which is about 17. The period of seasonal strength for this can run between now, April through to July. Consumer Staples in general can do well all the way through to October. The average gain from April 27 to October 7 is 9.18%. On the technicals, the chart shows what he would call a bit of a Bull flag. This sharpness has come on during takeover talks, but he is not playing it on this basis, but on a seasonal basis.
The bulk of their operating income comes in the quarter from September through to November, the start of the school season. The period of seasonal strength will obviously run from now, the end of April, all the way to September 30. The average gain for this company is 14.3%. There have only been 2 times where it has been negative in its 22 year history.
Consumer discretionary stocks, particularly this one, tend to do well in the spring. There is a huge spike up from March through to May, but then we get into a period of seasonal weakness. Consumer discretionary stocks tend to do very poorly during the summer. Relative performance is still trending higher on this, so it looks like there are still investors coming into it. We are getting to the end of seasonal strength in a couple of weeks.