November: A Historically Strong Month for the US Stock Market
A Consistent Pattern Emerges
Over the past decade, the S&P 500 index has consistently performed well in November, returning an average of 3.8% during this month. This trend is significant, as it outperforms the next best month, July, which saw an average return of 3.4%. Furthermore, the index has produced a positive return in nine out of the last 10 Novembers.
Long-Term Focus
While past performance is no guarantee of future results, understanding historical patterns can inform investment decisions. By focusing on long-term capital appreciation, investors can benefit from the trends that emerge over time.
Two Attractive Stocks Under $100
Shopify (NYSE: SHOP) and Uber Technologies (NYSE: UBER) are two compelling investment opportunities currently trading under $100 per share.
Shopify: A Comprehensive E-commerce Solution
Shopify provides a turnkey solution for retail and wholesale commerce, offering merchants a unified platform to manage sales and inventory across physical and digital storefronts. Its software integrates with online marketplaces and social media, and provides adjacent merchant solutions for marketing, payments, and logistics. Shopify’s AI features, known as Shopify Magic, automate workflows and surface insights for merchants. The company’s enterprise-grade platform, Shopify Plus, includes advanced tools for data analytics and wholesale e-commerce.
Uber: A Leader in Ride-Sharing and Food Delivery
Uber operates the largest ride-share platform in the US and globally, and the second-largest food delivery platform in the US. Its ability to blend services into a single mobile app creates cost-efficient cross-sell opportunities. Scale affords Uber a data advantage, supporting continuous improvements in ride dispatching, routing, and pricing. The company also uses its scale and data to help advertisers reach consumers with relevant offers.
Strong Financial Performance
Both Shopify and Uber reported strong financial results in their recent quarters. Shopify’s revenue increased 21% to $2 billion, and non-GAAP net income increased 85% to $0.26 per diluted share. Uber’s revenue increased 20% to $11.2 billion, and GAAP net income increased 12-fold.
Reasonable Valuations
Despite their strong performance, both stocks are reasonably valued. Shopify’s current valuation of 75 times adjusted earnings is tolerable, given its expected annual earnings growth rate of 26% through 2027. Uber’s valuation of 36 times earnings is also reasonable, considering its expected annual earnings growth rate of 22% through 2027.
A Buying Opportunity
Patient investors may find comfort in buying into these two stocks, which have strong fundamentals and growth potential. While it’s essential to start with a small position and build over time, the current valuations make them attractive opportunities for long-term investors.
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