3 Hot Stocks to Survive Summer

Editor's note: As part of our partnership with Nightly Business Report, TheStreet's Debra Borchardt will join NBR Monday (see video and transcript) to look at stocks that will benefit from being a seasonal favorite.

NEW YORK ( TheStreet -- Wall Street is running short on optimists these days.

"We're in for a rough summer," said Randy Frederick, a managing director at Charles Schwab.

Looking at trading volumes, it seems that many investors have decided it just isn't worth the risk to be in the market, adhering to the old adage "sell in May and go away." But while that strategy may have spared some wrinkles over the last two summers, investors would also have missed out big moves.

BMO Capital Markets investment strategist Brian Belski dug a little deeper and discovered that staying the course through the past two summers paid off in the long run.
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"Investors who were not invested in the market between Memorial Day and Labor Day during 2010 and 2011 dramatically underperformed those who maintained their discipline despite the extreme volatility exhibited during those months," said Belski. He added that if a person sold in May in 2010, it would have cost them 17%; if they did the same in 2011, it would have hurt another 14%. Seven of the 10 best days of 2010 happened in the summer, and four of the 10 best in 2011.

The following stocks are ripe for some summer loving. On a hot summer day, a Sam Adams summer ale from Boston Beer Co. ( SAM) is just the thing. It may also quench your portfolio's thirst for performance. Fundamentally, the company is expanding its brewing capacity in Cincinnati, and it's hiring. That's always a positive sign.

Total beer industry sales may be down, but not on the craft beer side. The company has started the Alchemy & Sciences project as a craft brew incubator. It's included expenses for the project in its financial forecasts but not potential profits, leaving room for upside.

Sam Adams' main risk is rising costs for raw goods. One risk it isn't worried about is Greece. The stock is down nearly 4% so far in 2012, but is up more than 25% in the past year, hitting a 52-week high of $115.49 in Dec. 27.

Walt Disney ( DIS) delivers two summer pastimes -- the blockbuster movie and theme parks. The stock hit a 52-week high of $46.10 last week and there are reasons to believe it can keep reaching for the sun.

It pulled back on the John Carter flop (which has ultimately earned over $280 million), but rallied right away on the huge success of The Avengers. Next up are movies Brave and Tim Burton's Frankenweenie.

The theme parks have delivered increased revenue with expansions under way in California, Hong Kong and a new park in Shanghai. Operating income rose 53% last quarter due to more visitors and higher spending, except in Paris. Park attendance is up 7%, while occupancy is up 2%. Not too shabby for this weak global economy.

Beer, movies, theme parks, but let's not forget cracking some crabs this summer. Ignite Restaurant Group ( IRG) is the home of Joe's Crab Shack, which tends to have seasonally strong summers. IRG is relatively new to the market having just recently gone public. The stock was priced at $14 and is currently trading at $17 and change.

For 12 weeks ending in March, IRG's revenue increased 18% to $103 million and net income totaled $2.5 million, up from $1.2 million.

The company owns and operates 122 Joe's and 16 Brick House Tavern + Tap restaurants. It is opening 11 new restaurants for fiscal year 2012. Sales have increased for 15 consecutive quarters and outperformed the KNAPP-TRACK report of casual dining restaurants. Comparable restaurant sales have grown by 25% over the last four years on a cumulative basis and outperformed the Knapp-track growth rate by 8%.

-- Written by Debra Borchardt in New York.

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