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10 Stocks That Avoid the September Slump


BOSTON ( TheStreet) -- This year's cruel summer in stocks may get worse if history serves as a guide.

The S&P 500 has recorded an average decline of 0.4% in September over the past 40 years, the worst month for the benchmark index, according to Capital IQ. The Dow Jones Industrial Average tends to fall 1.1% dating back to its beginning in 1896, says Dow Jones Indexes. That compares to an average gain of about 0.7% for all other months combined.

Yet, several stocks in the S&P 500, such as Google (GOOG) and Netflix (NFLX), tend to outperform.

September has delivered some of the worst beatings in the past decade -- as the financial crisis unfolded in 2008, when the Internet bubble kept bursting in 2002 and during the terrorist attacks in 2001.

Investors returning to the stock market after avoiding a tumultuous summer have their work cut out for them. In August, equities were crushed under the weight of a downgrade of U.S. debt by Standard & Poor's, as well as escalating concerns over European debt. Stocks rallied at the end of August on expectations another asset-purchase plan will be unveiled by the Federal Reserve when the central bank meets Sept. 20 to discuss interest-rate policy.

With so much riding on the Fed's next meeting, and given the historical performance of equities during September, investors are rightfully worried about the direction of stocks. As it turns out, some companies have been safer bets during September, based on historical returns in the month of September.

The following 10 stocks are the best performers on the S&P 500 in September over 10 years, according to data provided by Capital IQ. As some companies have been publicly traded for less than a decade, like Google, TheStreet is including those that have return data for at least five years. That excludes some big gainers in September like Carefusion (CFN) and Mead Johnson (MJN), which have only two years of returns data for the month.

10. Nike (NKE)

Company Profile: Nike is the largest seller of athletic footwear and athletic apparel in the world.

Average Return Since 2001: 6.6%

Best September Performance: +17.3% in 2009

Worst September Performance: -6.1% in 2001

Analysts Ratings: Nike still has significant upside potential, based on analysts' price targets. The average target price of $99.61 is about 14% above current price levels. Seventeen investment research firms, from FBR Capital to Stifel Nicolaus, rate the stock a "buy." The five other analysts covering the firm say investors should hold onto the stock.

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