Quest Diagnostics, Express Scripts Headline Best May Stocks

Quest Diagnostics and Express Scripts are among the best stocks to buy in May

Apr 26, 2017 at 11:41 AM
facebook twitter linkedin

We're always breaking down seasonal data, helping traders locate the best stocks to buy each month and quarter. Schaeffer's Senior Quantitative Analyst Rocky White just passed along data for the best stocks to buy in May, based on historical returns. Looking at the average performance for exchange-traded funds (ETF), the healthcare sector has dominated the month. Going off this, two stocks that have tended to perform well in May are Quest Diagnostics Inc (NYSE:DGX) and Express Scripts Holding Company (NASDAQ:ESRX)

best stocks to buy in may

Quest Diagnostics Stock Has Contrarian Value

It's a great time to check in on DGX stock, too, as the shares hit an all-time high of $106.59 earlier today, and were last seen trading at $105.98. The stock sports a 12-month advance of 40%, thanks in part to an impressive earnings beat last Thursday, April 20. More gains could be in store for DGX, since it's averaged a 2.2% gain in May over the past 10 years, and has only ended the month negative twice during that span. 

Plus, DGX seems to be a prime target for contrarian bulls, given the widespread pessimism seen on Wall Street. For one, the 5.7 million shares sold short equal more than nine times the stock's average daily trading volume, hinting at the potential for a short-squeeze situation. Plus, 13 of 18 analysts rate Quest Diagnostics Inc a "hold" or "strong sell," suggesting bullish notes from the brokerage bunch could come through. In fact, DGX stock received a price-target hike to $115 from $110 at Mizuho just yesterday. 

Express Scripts Stock Could Be Due for a Rebound

ESRX stock, on the other hand, has struggled mightily, selling off after earnings yesterday due to fears of losing its top client. While the shares bottomed at a nearly four-year low of $57.80 Tuesday, they've added 3% today to trade at $61.80. Meanwhile, the shares have only closed May lower once in the past 10 years, averaging a gain of 2.4%. 

It's hard to make a bullish contrarian case for Express Scripts Holding Company, given its weak long-term performance on the charts. Still, 11 of 17 analysts say ESRX stock is a "hold" or "strong sell," and short interest is also elevated. At the moment, it would take short sellers roughly two weeks to buy back their shares, based on ESRX's average daily trading volumes. 


Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 


300x250 - Banner 3 - v1