As warm weather thaws in the Northern states, something inside investors' minds snaps. Perhaps with more�barbecues going on, investors don't want to spend time following stocks, so they sell out of the market. Either way, the phrase "sell in May and go away" gets passed around once every year. What should you do with your stocks in May?
First, don't sell. As Fool Alex Dumortier demonstrated by analyzing the returns of the�S&P 500� (SNPINDEX: ^GSPC ) from 1926 to 2012, buying and holding returned 1.6% more compared to selling in May and buying back in October. And depending on transaction fees and taxes, the outperformance of "buy and hold" compared to selling in May could be even higher.
Second, if you're still worried, take a look at these defensive stocks that have held up well from Mother's Day to Memorial Day and beyond, and those looking relatively cheap headed into May.
Top 10 Defensive Companies To Own For 2014: British American Tobacco Industries p.l.c.(BTI)
British American Tobacco p.l.c., through its subsidiaries, engages in the manufacture, distribution, and sale of tobacco products. The company offers cigars, cigarettes, smokeless snus, roll-your-own, and pipe tobacco products under the Dunhill, Kent, Lucky Strike, Pall Mall, Vogue, Viceroy, Kool, Rothmans, Peter Stuyvesant, Benson & Hedges, and State Express 555 brand names. It has operations in the Asia-Pacific, the Americas, eastern and western Europe, Africa, and the Middle East. The company was founded in 1902 and is headquartered in London, the United Kingdom. British American Tobacco p.l.c. operates independently of Remgro Ltd. as of November 03, 2008.
Top 10 Defensive Companies To Own For 2014: Seroja Investments Limited (IW5.SI)
Seroja Investment Limited, an investment holding company, provides domestic marine cargo and coal transportation services in Indonesia and China. It charters tugboats and barges primarily to transport dry bulk freight comprising thermal coal, sand, and other quarry materials. The company primarily serves coal and cement producers. It owns and operates a fleet of 64 vessels consisting of tugboats and barges, which navigate waters around the Indonesian archipelago. The company is based in Singapore.
Top 5 Transportation Stocks To Buy For 2014: Strategic Diagnostics Inc.(SDIX)
Strategic Diagnostics Inc., a biotechnology company, develops, commercializes, and markets proprietary products, services, and solutions for the pharmaceutical, biotechnology, diagnostics, food safety, and environmental markets. Its life science portfolio includes products and custom services that supply critical reagents used across the life science research and development markets. These products and services include custom antibodies, in-vitro diagnostic-grade antibodies, proprietary critical reagent products, associated bio-processing services, and custom assay design and development services that are sold to pharmaceutical, biotechnology, and diagnostic companies, as well as to biomedical research centers. The company also provides Kit products, including immunoassays, which represent advanced technology for the detection of food pathogens and soil contaminants. Its detection technologies allow industrial customers to identify the presence of adulterants, such as chem ical toxins, biological pathogens, and other contaminants, which can compromise human or environmental safety, and/or impact efficiencies of production processes. These products are used in various applications, including food and beverage manufacturing, environmental management, and agriculture and agro-science. The company markets and sells its products in the life sciences, and food safety product categories through a direct sales force, Internet, and a network of distributors, as well as through its corporate partners in the United States, Canada, Mexico, Latin America, Europe, and Asia. Strategic Diagnostics Inc. was founded in 1987 and is headquartered in Newark, Delaware.
Top 10 Defensive Companies To Own For 2014: Steiner Leisure Limited(STNR)
Steiner Leisure Limited provides spa services and personal care products for men, women, and teenagers worldwide. The company offers beauty care products, including cleansers, toners, moisturizers, lotions, waxing products, cleansing accessories, and other skin care and body products, as well as aromatherapy oils and beauty tools; and hair care products, such as shampoos, conditioners, styling products, and related items. Its services include massages, facials, microdermabrasion, waxing, aromatherapy treatments, seaweed wraps, aerobic exercise, yoga, pilates, hair styling, manicures, pedicures, and teeth whitening, as well as various other beauty and body treatments and services; acupuncture; and medi-spa services comprising BOTOX Cosmetic, Dysport, Restylane, and Perlane. In addition, the company operates approximately 12 post-secondary schools, which provide education in massage therapy, beauty, skin care, and related areas at 30 campuses in 14 states. Further, it provid es procedures for the removal of unwanted facial and body hair in a clinical setting. The company offers its products and services under the Elemis, La Th�apie, Bliss, Rem�e, Laboratoire Rem�e, Mandara Spa, Mandara, Jou, and Chavana brands through department stores; third party retail outlets; distributors; salons; mail orders; and company owned Websites, including www.timetospa.com, www.timetospa.co.uk, www.blissworld.com, www.blisslondon.co.uk, and www.bodyworkmall.com, as well as through the QVC home shopping television channel. As of February 13, 2012, it served 152 cruise ships representing 19 cruise lines; and operated 54 resort spas, 11 urban hotel spas, 6 day spas, and 59 ideal image laser hair removal centers. Steiner Leisure Limited was founded in 1934 and is based in Nassau, the Bahamas.
Top 10 Defensive Companies To Own For 2014: Wilshire Bancorp Inc.(WIBC)
Wilshire Bancorp, Inc. operates as the holding company for Wilshire State Bank that offers a range of financial products and services. It accepts various deposit products that include certificates of deposit, regular savings accounts, money market accounts, checking and negotiable order of withdrawal accounts, installment savings accounts, and individual retirement accounts. The company?s loan portfolio comprises commercial real estate and home mortgage loans, commercial business lending and trade finance, and small business administration lending, as well as consumer loans, including personal loans, auto loans, and other loans. It also provides trade finance services that include issuance and negotiation of letters of credit, handling of documentary collections, advising and negotiation of commercial letters of credit, transfer and issuance of back-to-back letters of credit, and trade finance lines of credit. In addition, the company offers Internet banking services, auto matic teller machines, and armored carrier services. It has 24 full-service branch offices in Southern California, Texas, New Jersey, and the greater New York City metropolitan area; and 6 loan production offices in Colorado, Georgia, Texas, New Jersey, and Virginia. The company was founded in 1980 and is headquartered in Los Angeles, California.
Advisors' Opinion:- [By Philip]
Shares of Wilshire Bancorp (WIBC) of Los Angeles closed at $3.42 Friday, down 55% year-to-date. The shares have 18% upside potential, based on a mean 12-month price target of $4.04, among analysts polled by FactSet.
The company had $2.7 billion in total assets as of Sept. 30, with 24 branches in Southern California, Texas, New Jersey, and the New York City area, and six loan production offices in n Colorado, Georgia, Texas (two offices), New Jersey, and Virginia.
Wilshire Bancorp owes $62.2 million in federal bailout funds received through the Troubled Assets Relief Program, or TARP. The company raised $100 million in common equity during the second quarter, following an agreement with the Federal Deposit Insurance Corp. and state regulators to bring main subsidiary Wilshire State Bank's Tier 1 leverage ratio up to at least 10%. The Bank subsidiary's Tier 1 leverage ratio was 13.24% as of Sept. 30.
The holding company reported third-quarter net income available to common shareholders of $10.2 million, or 14 cents a share, increasing from $2.1 million, or 4 cents a share, during the second quarter, and $5.0 million, or 14 cents a share, during the third quarter of 2010.
The main factor in the earnings improvement was a reduction in credit costs, with a third-quarter provision for loan losses of $2.5 million, declining from $10.3 million the previous quarter and $18.0 million a year earlier. A $5.7 million decline in loan loss reserves during the third quarter directly boosted earnings.
With the company continuing its aggressive reduction of its commercial real estate loan portfolio and its nonperforming loans, Wilshire Bancorp's total assets declined 17% from a year earlier. During the third quarter, the company sold $28.7 million in loans, most of which were nonperforming, for a gain of $1.7 million.
Net interest income declined 14% year-over-year to $25.5 million in the third quarter, reflecting the balance sheet reduction.
The net interest margin -- t! he difference between a bank's average yield on loans and investments and its average cost for loans and deposits -- was a strong 4.23% in the third quarter, which was down from 4.42% the previous quarter, but up from 3.393% a year earlier.
Wilshire Bancorp's ratio of nonperforming assets to total assets was 2.46% as of Sept. 30, improving from 3.22% the previous quarter and 2.87% a year earlier. The annualized ratio of net charge-offs -- loan losses less recoveries -- to total loans was 0.46%, and with reserves covering 5.27% of total loans, the company appeared well-positioned for continued significant releases of reserves.
FIG Partners analyst Timothy Coffey on Oct. 28 reiterated his "Outperform" or "Buy" rating for Wilshire Bancorp, raising his 12-month price target to $4.50 from $3.80, also "estimating tangible book values of $3.43 in 2011, $4.21 in 2012 and $4.84 in 2013." The analyst said that he anticipated that "could start to reverse the DTA-Deferred Tax Asset valuation allowance over the coming quarters," and that "the improvement in the earnings power has resulted in losses below management's projections, which has increased the valuation allowance to $40 million." Coffey estimated that "company could have no tax expense or very limited expense in 2012 before a normalized expense returns in 2013."
The shares trade for 6.8 times the consensus 2012 earnings estimate of 50 cents, among analysts polled by FactSet, and just above their Sept. 30 tangible book value of $3.27, according to SNL Financial.
Four out of seven analysts covering Wilshire Bancorp rate the shares a buy, while the remaining analysts all have neutral ratings.
Top 10 Defensive Companies To Own For 2014: Agrium Inc Com Npv (AGU.TO)
Agrium Inc. engages in the retail of agricultural products and services worldwide. The company operates in three segments: Retail, Wholesale, and Advanced Technologies. The Retail segment supplies crop protection products, such as herbicide, fungicide, and insecticide products; fertilizers; seed products; and turf and ornamental products for lawn care or landscapes, golf courses, nurseries, greenhouses, athletic fields, or sod farms, as well as provides vegetation management and forestry services. It also offers wool sales and marketing, livestock auction, insurance, and real estate agency services. This segment markets its products and services through 1,250 retail outlets in the United States, Canada, Australia, Argentina, Chile, and Uruguay. The Wholesale segment produces, markets, and distributes a range of crop nutrients, such as nitrogen, potash, and phosphate products for agricultural and industrial customers. This segment also owns and operates facilities that upgr ade ammonia and urea to other products, such as urea ammonium nitrate solutions and nitric acid. The Advanced Technologies segment produces and markets controlled-release crop nutrients and micronutrients to the agriculture, specialty agriculture, professional turf, horticulture, and consumer lawn and garden markets. The company was formerly known as Cominco Fertilizers Ltd. and changed its name to Agrium Inc. in 1995. Agrium Inc. was founded in 1931 and is headquartered in Calgary, Canada.
Top 10 Defensive Companies To Own For 2014: Shore Bancshares Inc(SHBI)
Shore Bancshares, Inc. operates as the holding company for The Centreville National Bank of Maryland; The Talbot Bank of Easton, Maryland; and The Felton Bank, which provide various commercial and consumer banking products and services in Maryland and Delaware. It offers various deposit products, including commercial checking, savings, money market, Christmas savings, individual retirement, and overnight investment sweep accounts; interest-bearing and non-interest-bearing demand deposits, as well as time deposits; and certificates of deposit. The company also provides commercial loans, including secured and unsecured loans, working capital loans, lines of credit, term loans, accounts receivable financing, real estate acquisition development, construction loans, and letters of credit; and individual loans comprising mortgage, home improvement, installment, and other personal loans; credit cards; personal lines of credit; automobile; and other consumer financing. In addition , it offers merchant credit card clearing services; direct deposit of payroll, Internet banking, and telephone banking services; safe deposit boxes; debit cards; and automatic teller machine (ATM) services. Further, the company provides nondeposit products, such as mutual funds and annuities, and discount brokerage services; and trust, asset management, and financial planning services. Additionally, it offers insurance products and services, which comprise property and casualty, life, marine, individual health, and long term care insurance, as well as pension and profit sharing plans and retirement plans to businesses and consumers. The company operates 19 full service branches and 22 ATMs in the Kent County, Queen Anne?s County, Caroline County, Talbot County, and Dorchester County in Maryland, as well as in Kent County, Delaware. Shore Bancshares, Inc. was founded in 1876 and is based in Easton, Maryland.
Top 10 Defensive Companies To Own For 2014: SurModics Inc.(SRDX)
SurModics, Inc. provides drug delivery and surface modification technologies to the healthcare industry. The company offers surface modification coating technologies to enhance access, deliverability, and predictable deployment of medical devices, as well as drug delivery coating technologies to provide site-specific drug delivery from the surface of a medical device for the coronary, peripheral, neuro-vascular, and urology markets. It also provides a range of drug delivery technologies for injectable therapeutics, including microparticles, nanoparticles, and implants addressing a range of clinical applications, such as ophthalmology, oncology, dermatology, and neurology. In addition, the company provides in vitro diagnostic component products and technologies comprising microarray slide technologies, protein stabilization reagents, substrates, polymers and reagent chemicals, and antigens for diagnostic test kits and biomedical research applications. SurModics, Inc. market s its technologies and products worldwide through direct sales force consisting of sales professionals. The company was founded in 1979 and is headquartered in Eden Prairie, Minnesota.
Top 10 Defensive Companies To Own For 2014: National Australia Bank Ltd (NAB)
National Australia Bank Limited provides products, advice and services. In Australia, it operates through National Australia Bank, MLC and UBank. In the United Kingdom, it operates through Clydesdale Bank. In New Zealand, it operates through Bank of New Zealand. In the United States, it operates through Great Western Bank. Segments include Business Banking, Personal Banking, Wholesale Banking, UK Banking and NZ Banking, MLC and NAB and Great Western Ban. As of April 5, 2012, the Company and its associated entities ceased to be a substantial holder in BlueScope Steel Limited. On May 17, 2012, it ceased to be a substantial holder in Spark Infrastructure Group and Sandfire Resources NL. As of August 24, 2012, the Company and its associated entities ceased to be holder in Tabcorp Holdings Limited. In September 2012, the Company and its associated entities have ceased to be a substantial holder in Incitec Pivot Limited, as of August 30, 2012. Advisors' Opinion:- [By Dale Gillham]
NAB is still a long way from its all-time high of $44.84 from 2007, but has so far been able to hold above 50 per cent ($22.42) of its all-time high, which is a positive sign. Given that NAB has spent a lot of time in a zigzag formation above this level; you can see how strong this level has been for its shares. At present NAB is probably my least preferred bank stocks when weighing up the risks from a technical perspective, but while it stays above this 50 per cent level it has a greater probability of rising than falling.
What is holding it back? You can see how a few months ago NAB attempted to break the $26.00 level overhead, which has proven to be an important threshold for those just not willing to pay more for NAB. If you are a bit of a contrarian and like to pick underdogs, you may decide to keep NAB on your watch list because very soon I am expecting it to show where it is headed. A move back below the 50 per cent level would not bode well for those holding NAB.
Top 10 Defensive Companies To Own For 2014: Technical Communications Corporation(TCCO)
Technical Communications Corporation designs, develops, manufactures, distributes, markets, and sells communication security devices and systems worldwide. Its products are used to protect confidentiality in communications between radios, telephones, facsimile machines, and data processing equipment over wires, fiber optic cables, radio waves, and microwaves and satellite links. The company?s products include High Speed Data Encryptor, which provides cryptographic security for data networks operating at up to 34 million bits per second; Narrowband Radio Security family of products that offer security for voice and data communications sent over HF, VHF, and UHF channels; and Secure Telephone, Fax, and Data systems, which provide voice, fax, and data encryption in a telephone package. It also offers Secure Portable Telephone Attachment that provides digital security between telephone and handset; Fax Security System, an automatic transmission fax system, which connects to f acsimile machine; Executive Secure Telephone that offers voice and data security in a telephone package; and CipherTalk8000 and CipherSMS secure wireless product to provide encrypted mobile communications. In addition, the company offers CipherONE family of network security systems, which consist of hardware and software-based encryption products for local area network, wide area network, and Internet applications, as well as a network security management system. Further, it provides Frame Relay Network Encryptor; IP Network Encryptor for encryption security at the Internet protocol layer; and KEYNET Network Security Management System, a Windows NT-based key and security device management system. The company markets its products to governmental agencies, law enforcement agencies, financial institutions, and multinational companies requiring protection of mission-critical information. Technical Communications Corporation was founded in 1961 and is based in Concord, Massachuse tts.
