Which stocks are best positioned to buck the seasonal trend?
Discover 9 handpicked opportunities to outperform in the coming months.
May has arrived, and with it comes a well-known Wall Street idea: Sell in May and go away. The thinking is simple. Investors sell stocks in May, stay in cash during the summer, and return to the market around October.
Historically, this pattern has some backing. Since 1945, the has gained about 2% on average from May to October, compared to around 7% from November to April.
But 2026 looks different. Both the S&P 500 and started May at record highs. This has been driven by a very strong earnings season.
Around 84% of companies beat expectations, which is the highest level in years. Earnings growth has also been strong, rising over 27% from last year. Analysts now expect earnings to grow more than 21% for the full year.
In this situation, selling stocks just because it is May may mean missing a rally that still has strong support.
That said, risks remain. Global tensions are still a concern. Inflation is above the Fed’s target. Valuations are also stretched, with the market trading above its long-term average. This suggests stocks are not cheap.
For investors who want to stay invested, the focus should be on being selective. Look for companies with strong fundamentals, reasonable valuations, and solid support from analysts.
9 Stocks Well-Positioned to Outperform
We turned to the Investing.com screener to find US stocks offering both downside protection and upside potential, regardless of the season. To do so, we looked for stocks meeting the following criteria:
Market: United States
Market capitalization greater than $10 billion
Upside potential of over 30% according to InvestingPro Fair Value (which synthesizes several recognized valuation models)
Upside potential of over 30% based on the average analyst target
InvestingPro Financial Health Score greater than 2.5
Growth Health Score greater than 3/5
Cash flow health score greater than 3/5
This research has allowed us to identify 9 opportunities:
Specifically, these US stocks with strong health scores trade at a 32.2% to 48.4% discount to InvestingPro Fair Value, with analysts seeing upside of 30.4% to 92.5%.
Among these stocks are:
1. DexCom
is a global leader in continuous glucose monitoring systems, replacing traditional finger-prick testing for people with diabetes. With diabetes cases rising worldwide and adoption of connected health tools accelerating, demand for its products continues to grow.
Its Q1 2026 results, released on April 30, reinforce this trend. The company reported adjusted EPS of $0.56, ahead of the $0.47 estimate, and revenue of $1.19 billion, up 15% year over year. DexCom also reaffirmed its full-year guidance while raising its operating margin outlook, a strong signal of confidence. Despite this, the stock still trades below the average analyst price target of $86.88.
2. ResMed
leads the global market for devices treating sleep-related breathing disorders, including sleep apnea, along with chronic lung diseases. Its model combines hardware with cloud-based software for home patient care, supporting recurring revenue and margin expansion.
For Q3 fiscal 2026, also reported on April 30, ResMed posted EPS of $2.86, beating estimates of $2.79. Revenue came in at $1.43 billion, up 10.8% year over year, while gross margin expanded to 62.2%. Following the results, Royal Bank of Canada raised its price target to $321 and maintained an outperform rating, reflecting strong confidence in the company’s outlook.
However, all other stocks on the list show even higher upside potential according to Fair Value!
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ProPicks AI: AI-managed stock picks every month, with several picks that have already taken off this month and in the long term.
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Fair Value: This feature aggregates 17 institutional-grade valuation models to cut through the noise and show you which stocks are overhyped, undervalued, or fairly priced.
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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such, it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remain with the investor.
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