Now that we’ve gotten several of the biggest earnings reports out of the way, it will be interesting to see where the market wants to go in May.
With stocks trading around all-time highs, the ongoing reopening of the economy, and the possibility of inflation risk coming into play, investors need to stay focused and pay close attention to new trends as they are emerging. There’s also the old investment adage “Sell in May and Go Away” to keep in mind as we head into the month.
While it might be tough to predict where the overall market is heading in the short term, there are still plenty of great companies that stand out as strong buying opportunities at this time.
If you are looking to put some money to work this month, this article is for you. Here are the top 3 stocks to buy in May.
1. Century Communities
A lot of the homebuilder stocks have rallied substantially in 2021, but that shouldn’t stop you from seeking new buying opportunities in the sector. Case in point—Century Communities (NYSE:CCS), a company that designs, develops, constructs, markets, and sells single-family attached and detached homes.
It’s also involved in the entitlement and development of the underlying land. With operations in some of the hottest real estate markets in the country including Atlanta, Central Texas, Colorado, Nevada, and Utah, Century Communities is benefitting from unprecedented demand in the housing market.
The company just reported blowout Q1 earnings numbers including Net Income of $101.7 million, up 289% year-over-year. Total revenues increased 67% to a company record $1 billion, and the company also received a record Net New Home Contracts of 3,455 in the quarter, up 45% year-over-year.
Century Communities upped its forward guidance for 2021 and the stock just broke out to new all-time highs, making it a great choice for investors that are looking to add a homebuilder stock in May.
2. Stericycle
Another solid stock pick for the month of may is Stericycle Inc (NASDAQ:SRCL), which is the largest medical waste management service provider in North America. Medical waste is any kind of waste that contains infectious or potentially infectious material, and it requires a very specific and secure method for disposal.
When you think about how much of this medical waste is being produced in the COVID-19 vaccine rollout, it’s easy to recognize the potential in a company like Stericycle.
What’s also great about this company is the fact that it only has one publicly traded competitor at about 1/60th of its size. That means it is a true market leader and that Stericycle can continue to grow by taking market share from smaller players in the industry over the years.
Stericycle is rallying at this time after reporting its Q1 earnings and saw its regulated waste and compliance services organic revenues grow by 6% year-over-year. After breaking out of several months of consolidation, the stock has plenty of room to run in May, which makes it a very intriguing prospect at this time.
3. The Mosaic Company
The materials sector has been quite strong this year, and one of the names in the sector that stands out is The Mosaic Company (NYSE:MOS). The stock has rallied over 48% year-to-date and could be in for more gains given strong crop prices and a positive outlook for the agriculture industry for the remainder of the year.
Mosaic is one of the world’s largest producers and marketers of concentrated phosphate and potash crop nutrients. These nutrients are crucial for the global agriculture industry, as they are added to the soil to replace essential nutrients that are depleted by crops.
The company has customers in 40 different countries and is certainly benefitting from rapidly increasing commodity prices. Keep in mind that we could be dealing with inflation in the months ahead thanks to all of the recent stimulus, which is another plus for Mosaic, a company that benefits from a declining USD.
It’s also nice to know that global food demand will pretty much always be strong, regardless of what is going on with the economy. Mosaic will report its Q1 earnings results on Monday, May 3, after the market close. A strong report could be just the catalyst this stock needs to start its next leg up.