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“Sell in May and Go Away”? Not Here: 3 Stocks I’m Buying Next Month

Image source: Getty Images
Image source: Getty Images

Written by Ambrose O'Callaghan at The Motley Fool Canada

Canadian investors with some experience under their belt may have heard the adage, “Sell in May and go away.” This maxim refers to conventional wisdom that the market is weak from May to October. Historical data has supported this adage, but experienced investors know not to draw conclusions based on past results. Today, I want to zero in on three stocks that are worth buying before the summer season. Let’s jump in.

Here’s why I’m more bullish on Cineplex stock in the spring of 2023

Cineplex (TSX:CGX) is the first stock I’d look to snatch up in early May. This Toronto-based entertainment and media company boasts a monopoly on the cinema business in Canada. Shares of Cineplex have dropped 2.7% month over month as of close on May 1. The stock has jumped 10% so far in 2023. You can see more of its recent performance with the interactive price chart below.

Investors in Cineplex should be excited about the upcoming film slate. Indeed, Cineplex and its peers have already benefited from success stories like Avatar: The Way of Water, John Wick 4, and The Super Mario Bros. Movie. Promising movie releases in May include titles like Guardians of the Galaxy Vol. 3, Fast X, and The Little Mermaid. In fiscal 2022, this company delivered revenue growth of 93% to $1.26 billion. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 320% to $251 million.

Shares of Cineplex are trading in favourable value territory compared to its industry peers at the time of this writing. It recently surged back to profitability and its on track for solid revenue growth going forward.

This stock offers security and a chance at growth going forward

GFL Environmental (TSX:GFL) is a Vaughan-based company that offers non-hazardous solid waste management and environmental services in Canada and the United States. Shares of this stock have climbed 7.1% month over month as of close on May 1. The stock is up 23% in the year-to-date period.

This company released its first-quarter (Q1) fiscal 2023 earnings on April 27. GFL Environmental delivered organic revenue growth of 14% to $1.79 billion in Q1. The company was powered by an increase in the price of solid waste in addition to higher volumes across GFL’s collection and post collection operations. Meanwhile, adjusted EBITDA surged 24% to $440 million.

GFL Environmental stock is trading in solid value territory compared to its competitors at the time of this writing. Moreover, it offers a quarterly dividend of $0.013 per share, which represents a modest 0.14% yield.

One more top dividend stock I’d add in early May

Telus (TSX:T) is the third stock I’d look to snatch up right now. This Vancouver-based telecommunications and information technology company provides a range of products and services in Canada. Its shares have increased 8.6% so far in 2023. The stock is still down 10% year over year.

Investors can expect to see Telus’s first batch of fiscal 2023 earnings early this month. In fiscal 2022, Telus delivered industry-leading Mobile and Fixed customer growth of 301,000 — up 29,000 compared to fiscal 2021. Moreover, it posted record customer additions of 1.04 million for the full year. Free cash flow surged 57% to $2.0 billion.

Shares of this top telecom stock currently possess a solid price-to-earnings ratio of 24. Meanwhile, Telus offers a quarterly dividend of $0.351 per share, representing a very solid 4.9% yield.

The post “Sell in May and Go Away”? Not Here: 3 Stocks I’m Buying Next Month appeared first on The Motley Fool Canada.

Should You Invest $1,000 In Cineplex?

Before you consider Cineplex, you'll want to hear this.

Our market-beating analyst team just revealed what they believe are the 5 best stocks for investors to buy in April 2023... and Cineplex wasn't on the list.

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See the 5 Stocks * Returns as of 4/18/23

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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Cineplex and TELUS. The Motley Fool has a disclosure policy.