These stocks average gains of 5% to 16% in January while the stock market tends to be weak

January is one of the weaker months of the year for the stock market, yet these stocks tend to excel in January.

Over the last 20 or more years these stocks have increased in January more than 77% of the time and averaged over 5% gains, and in some cases as much as 16% for the month.

Here are three stocks that have excelled in January, along with the summary statistics and trade dates as compiled by Trading.biz analyst Cory Mitchell.

• Netflix, Inc. (NFLX): Increased 81% of the time between January 5 and February 7. The average return is 16.1% over the last 21 years.
• D.R. Horton, Inc. (DHI): Increased 77% of the time between January 1 and February 14. The average return is 5.6% over the last 31 years.
• Wynn Resorts, Limited (WYNN): Increased 86% of the time between January 1 and February 1. The average return is 5.4% over the last 21 years.

For comparison, the S&P 500 has moved higher in January only 50% of the time over the last 20 years, with an average gain of 0.1%.

Note that the trade dates don’t necessarily align with the exact start and end of January. This is because trade dates are optimised based on the historical price pattern of the stock.

Here are the three stocks and how they have performed over the last year, on one chart.

Netflix, Inc. (NFLX)

The NFLX trade is held from the January 5 open till the February 7 close.

Over the last 21 years, the average return for all winning and losing trades is 16%. The price has finished higher during this trade period in 17 of those 21 years.

That doesn’t mean every January is a steady climb. The largest profit was 89% in 2013, while the largest loss was 32% in 2022.

Netflix is expected to have earnings on January 24, while the trade period is underway. This can lead to large price moves, either up or down. Historically, the bias is to the upside, but in 2022 there was a big drop on earnings.

D.R. Horton, Inc. (DHI)

The DHI trade is held from the start of the year till the February 14 close.

Over the last 31 years, the average return for all trades is 5.6%. The price has finished higher during this trade period in 24 of those 31 years.

The largest profit was 28% in 1998 and the largest loss was 23% in 2022.

DHI is down a couple of percent to start the year, which may provide an advantage for the historically strong January stock. It can be picked up at a better price than where it started the year (the original entry point).

Wynn Resorts, Limited (WYNN)

The Wynn trade is ideally opened at the start of the year and held till the February 1 close.

Over the last 21 years, the average return for all trades is 5.4%. The price has finished higher during this trade period in 18 of the last 21 years.

The largest profit was 31% in 2019, while the largest loss was 29% in 2009.

WYNN has already climbed several percent in 2024. The ideal entry point is near the original entry point—the start of the year—at $90.83.

Understanding averages and seasonality

Seasonality is the study of how assets move at different times of the year. These statistics are backward-looking and can’t accurately forecast what will happen this January. The information is provided for informational purposes, not an investment recommendation.

Averages can mask the highly volatile nature of stock trading, as all these stocks have had large drops in January despite the overall historical upward bias during the month.