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Stocks to Watch This Spring

As the harsh wintry months come to an end, we start to spend less time inside our homes and move our daily activities outside. Whether it be working out in the yard, spending time doing recreational activities, or enjoying vacations with our family, springtime brings warm weather and outdoors fun.

For all of our springtime activities, there are companies there to cater to our needs. Let's take a look at a few companies that

Farming

One thing that kicks off in the springtime is farming. Farmers need a lot of equipment in order to tend to their crops, and one of the biggest manufacturers of farm equipment is Caterpillar (CAT). Caterpillar posted disappointing fourth quarter earnings back in January, which sent the stock into a steep sell off, and whileit has yet to be able to make back its losses, it does appear to have found its footing and is trading higher headed into the spring.

In addition to equipment, farmers also need seeds for their crops. Monsanto (MON) is one of the largest suppliers of seeds to farmers, and in addition to its seeds business it also aids in agricultural productivity, through the manufacture of products such as mulch and herbicides. The stock has been in a strong upward trend, and is currently trading just shy of its 52 week high.

Home Improvement

As we move into spring, we start to focus on home improvement projects and landscaping chores. Two retailers that benefit from this increased home improvement activities are Home Depot (HD) and Lowe's (LOW). Both retailers reported fourth quarter results last month, and in both instances we saw better than expected earnings for the quarter.

Each retailer has been benefitting from an improving housing market, and with the housing market in recovery this spring should see increased store traffic. An influx of new homeowners are entering the market which by itself will help boost traffic to the stores, and with home improvement projects picking up in the spring both retailers should continue to show strength.

Family Vacations

One thing we always associate with the spring and summer months is family vacations. Everyone loves a good amusement park, and Cedar Fair (FUN) operates some of the most successful amusement parks in the nation. The company's lineup of parks include Cedar Point, Carowinds, Dorney Park and Kings Dominion. The stock has been strong over the past year, despite posting disappointing earnings during its last two quarters. Cedar Fair will look to increased foot traffic in the coming months to get its earnings back on track.

Outdoor Sports

Spring is also the time we start to enjoy more outdoor sports. Dick's Sporting Goods (DKS) is one of the biggest sporting goods retailers, selling equipment for just about any sport you can think of. The company does a good deal of business during any season, but during spring traffic really picks up as people prepare for the spring and summer months ahead. The company recently reported disappointing earnings for its fourth quarter, which resulted in some steep selling, but it is already recovering and making back some of its losses. Last year we also saw a fourth quarter miss by the company, which was followed up by strong first quarter sales, and it will try to replicate those results this spring.

 

Disclaimer: The author of this article has a long position in Caterpillar (CAT).

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.