12 Best Spring Stocks To Buy Now

Published May 23, 2023 at 9:15 am EDT Updated August 31, 2026 at 8:43 pm EDT

In this article we present the list of 12 Best Spring Stocks To Buy Now.

If historical trends are anything to go by (and they usually are), then financial stocks like Mastercard Incorporated (NYSE:MA), PayPal Holdings, Inc. (NASDAQ:PYPL), and JPMorgan Chase & Co. (NYSE:JPM), as well as a wide range of energy stocks will be some of the best stocks to buy this spring.

The Running of the Spring Bulls

The stock market has traditionally performed very well during the spring, which is then followed by a summer swoon as institutional investors like hedge funds pare back their holdings in anticipation of lower summer trading volumes (and the resultant spike in volatility) and more time off for staff.

That’s particularly true of the NYSE, with April and May being the index’s strongest and third-strongest months over the past 20 years. The index has posted monthly gains during April over 16 of the past 20 years, while the index has risen during 14 of the past 20 Mays.

It’s a similar story when it comes to the stocks that make up the S&P 500, which have posted gains during 14 of the past 20 Marchs, 15 of the past 20 Mays, and 16 of the past 20 Aprils, the latter being the strongest performing month for the index. Spring has also been a good season for tech stocks, with the Nasdaq posting gains over 13 of the past 20 years in each of March, April, and May, ranking them in a tie as the third-best performing months for the index.

Energy and Finance Stocks Do a Lot of Spring Cleaning (Up)

When it comes to the performance of specific industries, energy and finance stocks have often been the runaway spring winners. According to CNBC, between 2001 and 2010, nearly half of all stocks that posted at least 20% gains during any given spring were either finance or energy stocks, with finance stocks leading the way.

There’s a surprisingly strong historical correlation between the energy and financial sectors which makes their equally strong springs somewhat less surprising. Naturally, the energy sector is highly correlated with the price of West Texas crude, at 71%. What many investors may not know is that it’s also highly correlated with the finance sector, with the correlation between the S&P 500 energy and finance indexes standing at 70% according to data compiled by Bloomberg.

In terms of where the two sectors stand today, they’re somewhat at odds despite their strong stock market correlation. The banking sector is experiencing somewhat of a crisis, with many U.S. banks borrowing heavily but tightening their lending policies, which has some experts concerned about a forthcoming credit crunch.

On the other hand, the energy sector looks like it has the potential to outperform the broader market for a third straight year in 2023 thanks to oil prices that are expected to steady but also rise this year, impressive free cash flow yields, and the lowest P/E ratio among all S&P 500 sectors.

With that in mind, let’s take a look at 12 spring stocks to buy now.

Source:unsplash

Our Methodology

The companies in the following list of the best spring stocks to buy now are gathered from the finance and energy sectors, traditionally the strongest performing sectors during the spring, and then ranked based on hedge fund sentiment. We follow a select group of hedge funds because Insider Monkey’s research has uncovered that their consensus stock picks can deliver outstanding returns.

All hedge fund data is based on the exclusive group of 900+ funds tracked by Insider Monkey that filed 13Fs for the Q1 2023 reporting period.

12 Best Spring Stocks To Buy Now

12. Schlumberger Limited (NYSE:SLB)

Number of Hedge Fund Shareholders: 68

JPMorgan Chase & Co., Mastercard Incorporated, and PayPal Holdings, Inc. are a few of the stocks that appear poised for strong springs. Another is oilfield services giant Schlumberger Limited (NYSE:SLB), which is coming off an exceptional 2022, growing revenue by 23% to $28.1 billion, including a 25% rise in services revenue. Earnings per share jumped by 70% to $2.18, while the company generated an impressive $3.7 billion in free cash flow.

Schlumberger Limited believes the macro backdrop suggests a strong multi-year upcycle for the sector is ongoing, which should only increase the demand for Schlumberger’s services as investment in the space continues to pick up and new projects are launched.

With things looking up over the longer term, Schlumberger has begun returning more cash to shareholders through buybacks and dividend hikes, though on the latter front, its dividend yield of 2.18% is still rather light compared to the industry average.

VGI Partners made the following comment about Schlumberger Limited in its 2022 annual investor letter:

“In addition to defence, we have focused our efforts on other new sectors where we see structural growth, including energy and medical technology. The long-term outlook for energy looks highly attractive given many years of under-investment and more recently amplified by ESG constraints and corporate discipline. Although we reviewed commodity owners (where we leveraged the expertise of the Regal resources team), we focused our efforts on the second derivative – the oil service companies. These are the picks-and-shovels of the industry and arguably the highest-quality way to gain exposure. As a result, we invested in Schlumberger Limited earlier this year and grew this to a circa 8% weight during the year (now circa 3%)”

11. The Goldman Sachs Group, Inc. (NYSE:GS)

Number of Hedge Fund Shareholders: 70

The Goldman Sachs Group, Inc. (NYSE:GS) ranks as the 11th best spring stock to buy now and should be of particular interest to value investors. The company ranked third on our list of the Most Profitable Value Stocks Now after pulling in $8.79 in GAAP EPS during the first quarter, beating estimates by $0.69. Revenue did fall year-over-year however and analysts were mixed on the quarterly results.

The Goldman Sachs Group, Inc. is undertaking several initiatives to deal with the challenging macro environment, including the partial sale of its Marcus unsecured loan portfolio. With the pace of fundraising expected to slow throughout the rest of the year, the company is also scaling back its share repurchase program.

Manole Capital Management discussed The Goldman Sachs Group, Inc.’s partnership with Apple in its Q3 2022 investor letter:

“Back in 2019, The Goldman Sachs Group, Inc. made a splash in the card industry by working with Apple and MasterCard on a credit card. The actual card is fairly sleek (as you can see below), as customers names are etched into an Apple titanium card. The no-fee card generated a lot of hype, as many early users were quick to post their latest card on various social media sites.

The initial goal of Marcus (back in 2016) was to leverage Goldman’s wonderful name brand and build a full-service digital bank. This card was a large piece of GS’s ambitions to grow its retail banking franchise called Marcus. After 5 years, Marcus now has 14 million customers and $16 billion in loan balances. Surprisingly, Marcus now represents nearly 20% of the firm’s total revenue.

We thought it would be interesting to look how the Apple Card is doing in terms of loans and exposures. With over $100 billion in assets, this has been a successful source of cheap deposits for GS. Despite having an institutional / “white shoe” brand in the investment banking and trading world, GS’s Apple Card has been a disappointment.” (Click here to read the full text)

10. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Shareholders: 74

Hedge fund ownership of Exxon Mobil Corporation (NYSE:XOM) has dipped by 14% over the past year after hitting a 10-year high in the first quarter of 2022. The company’s shareholders have been pressuring it to consider abandoning its fossil fuel investments, or at the very least to look into the potential costs of abandoning them versus the financial risks those investments could incur if the world achieves net-zero emissions by 2050. Exxon plans to invest as much as $25 billion annually over the next few years on various energy projects.

While Exxon Mobil Corporation believes the net-zero initiative is unlikely to succeed, it’s nonetheless looking into other ways to diversify into renewables, including the recent purchase of a 120,000-acre tract of land in Arkansas that’s believed to be rich in lithium. The company has also been expanding its EV charging network.

First Eagle Investments Global Fund likes some of the other things Exxon Mobil Corporation has been doing with its cash, as relayed in the fund’s Q2 2022 investor letter:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industrywide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

9. ConocoPhillips (NYSE:COP)

Number of Hedge Fund Shareholders: 75

Hedge funds have been swarming into ConocoPhillips (NYSE:COP) in recent quarters, with ownership of the stock jumping by 50% since Q3 of 2021, which helped push the stock up to ninth on the list of top spring stocks to buy now. Steve Cohen’s Point72 Asset Management opened a new COP stake in Q1, while Louis Bacon’s Moore Global Investments did so in the fourth quarter of last year.

ConocoPhillips achieved record production of 1,792 MBOED in the first quarter beat earnings estimates by over 10% at $2.38. That could be just the tip of the iceberg when it comes to company’s earnings potential, as it recently unveiled a 10-year plan in which it projects to generate $225 billion in free cash flow at a modest West Texas price point of $60 per barrel. After accounting for capital expense during that timeframe, that could leave it with $100 billion or more in excess cash, the bulk of which will likely be returned to shareholders.

Oakmark Global Fund revealed why it believes ConocoPhillips shares to be undervalued in its Q1 2023 investor letter:

“ConocoPhillips is one of the largest and lowest cost U.S. exploration and production companies in the country, led by CEO Ryan Lance—in our view one of the best value creators in the industry. ConocoPhillips’s share prices fell in the first quarter as oil prices receded, which is not atypical. We were buying the company at prices where it could generate its entire market cap in free cash flow over the next decade while growing the production such that at the end of that time, the base of production would be one-third higher. This sort of reinvestment opportunity is unique to ConocoPhillips and clearly not reflected in the current share price.”

8. American Express Company (NYSE:AXP)

Number of Hedge Fund Shareholders: 79

The number of hedge funds long American Express Company (NYSE:AXP) hit a 10-year high in the first quarter and has risen in each of the past three quarters. Warren Buffett’s Berkshire Hathaway maintained its gargantuan AXP holding during Q1, owning nearly 152 million AXP shares worth over $25 billion as of March 31.

American Express Company was one of ten companies with “Great” Earnings Reports Jim Cramer is Talking About after the company grew revenue by 21.7% year-over-year to $14.3 billion, though its EPS of $2.40 missed estimates. Cramer characterized it as “a gigantic quarter with tremendous growth”.

Some analysts weren’t quite as bullish on the results however. BMO Capital lowered its price target on American Express Company to $185 from $194, noting that the company’s growth is moderating while its credit losses are on the rise. Piper Sandler also lowered its price target on the stock, dropping it to $172 from $179, given expectations that comps will become more challenging later this year and into 2024 as consumer leverage rises.

7. Citigroup Inc. (NYSE:C)

Number of Hedge Fund Shareholders: 81

Hedge funds continued to sell off Citigroup Inc. (NYSE:C) during Q1, with the number of funds long Citigroup falling for the 16^th time in the last 21 quarters. Ownership of the stock has fallen by 37% during that time. Citigroup is another finance stock that Warren Buffett loves, while Lee Ainslie’s Maverick Capital was at the other end of the spectrum, selling off its Citi stake during Q1.

Citigroup Inc. appears to be rather attractive from several standpoints, including its industry-low price-to-book ratio of 0.43x and its moderate price-to-earnings ratio of 6.39x. While Citi hasn’t raised its dividend payout in four years and still has a relatively high payout ratio compared to the industry average despite that, the company is expected to begin repurchasing shares again later this year.

Diamond Hill Long-Short Fund noted that some of Citigroup Inc.’s initiatives may be dilutive to the company’s earnings in the near-term as of the fund’s Q1 2022 investor letter:

“Shares of Citigroup declined in the quarter as investors became increasingly negative on capital markets activity. The company is also continuing to divest certain consumer banking geographies which may be dilutive to earnings in the near term.”

6. Wells Fargo & Company (NYSE:WFC)

Number of Hedge Fund Shareholders: 85

Closing out the first part of our list of the best spring stocks to buy now is Wells Fargo & Company. Several hedge funds bailed on Wells Fargo in the first quarter, including Warren Buffett, who otherwise maintains high conviction in several other finance stocks. The company nonetheless ranks as one of hedge funds’ top five picks among investment banks.

Wells Fargo & Company bought back $4 billion worth of shares in Q1 and appears poised to continue buying back shares in the coming quarters. CEO Charlie Scharf recently stated that the company feels good about the size of its buffer zone above the regulatory minimums required to be held by banks to balance out their risk-weighted assets, which would allow them to continue buying back shares while otherwise remaining fiscally prudent.

Davis New York Venture Fund is impressed by the resiliency of Wells Fargo & Company’s customers, as expressed in the fund’s 2022 annual investor letter:

“Our investment thesis for our next largest bank investment, Wells Fargo, is totally different. As is well known, Wells Fargo & Company is the country’s third-largest bank, serving one in three U.S. households. Years of regulatory missteps under prior managements resulted in reputational damage, higher-than-average expenses, numerous consent orders, caps on asset growth, all added to the negative impact of low rates on their interest income. However, where others see bad news, we see resiliency and gradual improvement. Wells Fargo’s resiliency is reflected in the fact that despite years of terrible headlines and congressional hearings, Wells Fargo’s core customers stayed put and customer attrition remains extraordinarily low.

As to gradual improvement, new management has made steady headway in closing consent orders, settling regulatory matters and upgrading systems. Thus, rather than increasing profits from growth, Wells Fargo’s earnings growth for the next three-to-five years should come from the combined tailwinds of rising interest income, partially offset by normalizing credit costs, reduced expenses as systems improve and the scandals of the last decade are gradually put behind them, and the return of excess capital through share repurchases and rising dividends. The hypothetical earnings bridge displayed in Figure 6 gives some sense of the earnings power we see unfolding in the years ahead for this durable financial franchise.

While our grounded optimism carries the day, we are mindful of the risk that Wells Fargo’s historically excellent credit culture may have deteriorated, or that exasperated regulators may choose to extract even more major penalties for past infractions.”

PayPal Holdings, Inc., JPMorgan Chase & Co., and Mastercard Incorporated are three of the top spring stocks to buy now. Check out the details by clicking the link below.

5. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Shareholders: 89

The Charles Schwab Corporation (NYSE:SCHW) reached a new all-time high in hedge fund ownership during Q1 among the select group of funds tracked by Insider Monkey. The company has become increasingly more popular with hedge funds over the years and now ranks ahead of industry titans like Citigroup and Wells Fargo as a result.

The Charles Schwab Corporation shares are down by 38% this year, largely on fears that the brokerage firm would follow in the path of SVB Financial and Signature Bank due to clients migrating their cash to institutions seen as bigger and safer. While Charles Schwab’s deposits did shrink by 11% in the first quarter, the company nonetheless grew revenue by 10% and net income by 14% year-over-year during the quarter, as its strong brokerage activity more than outweighed the drop in its personal banking segment.

Baron Asset Fund believes The Charles Schwab Corporation is well positioned to continue growing earnings long-term, as outlined in its Q1 2023 investor letter:

“Shares of online brokerage firm The Charles Schwab Corporation declined during the quarter following the failure of SVB that led to weakness in Financials generally and particularly in regional banks. We do not believe Schwab is at any risk of a potential solvency issue (or run on the bank). Despite running a much different business than SVB, Schwab is facing near-term deposit pressure through cash sorting in the wake of SVB’s collapse. As interest rates rose, Schwab customers continued to move their uninvested cash balances into higher-yielding money market funds. As cash balances at Schwab decrease, the company may need to raise short-term external funding, which is more costly than the customer cash balances being depleted. This trend has pressured its earnings estimates and contributed to the recent share price weakness. Nevertheless, we retain long-term conviction in the value of Schwab’s franchise. Despite dislocation in the financial system, Schwab saw accelerating net inflows year-to-date, gathering over $75 billion in new assets in just the first two months of 2023. We remain encouraged by the firm’s exceptional client loyalty levels, robust organic growth, and industry-leading operating expense per client assets. Schwab remains well positioned to retain client assets and increase long-term earnings growth, in our view.”

4. Bank of America Corporation (NYSE:BAC)

Number of Hedge Fund Shareholders: 95

Bank of America Corporation (NYSE:BAC) is only about half as popular among hedge funds as it was six years, but has maintained relatively flat levels of hedge fund ownership over the past three years. Warren Buffett’s Berkshire Hathaway and Ric Dillon’s Diamond Hill Capital are two of biggest Bank of America shareholders in our database, with Berkshire owning over 1.03 billion shares.

According to Bank of America Corporation’s Q1 2023 Earnings Call Transcript, payments from customers’ accounts grew by 9% in March and by 8% during Q1, and the investment bank characterized their financial position as relatively healthy. The bank’s overall revenue rose by 13% during Q1, while its net interest income was up by 25%. In contrast to the small deposit flight from Charles Schwab in Q1, Bank of America further noted that about 80% of its deposit balances in the U.S. are held by customers who’ve been with the company for at least a decade.

Oakmark Equity and Income Fund believes Bank of America Corporation to be one of the best managed companies in the finance sector, as it revealed in its Q1 2023 investor letter:

“The Oakmark Equity and Income Fund has 29% of its equity portfolio in financials. This made the March sell-off painful, but we do not believe that this has meaningfully changed the value of most of our financial equity holdings. In fact, we were adding to financial positions throughout March. We believe that one way to analyze our financial holdings is to look at them in different buckets given their various business models and risk profiles. Almost 30% of our financial exposure is in insurance companies and insurance brokers. Insurance companies have very stable liability profiles, so the main risk is a change in asset values. We are comfortable with their investment portfolios and think these stocks are quite attractive. Around 5% of our financials are asset managers. This leaves a little over 40% of the financials exposure in a varied group of banks and lenders. About 5% of that portfolio is in Bank of America Corporation and State Street. These two banks are designated as Systematically Important Financial Institutions and are held to higher regulatory standards. Our largest single financials holding is Bank of America, which has grown deposits during March, and we believe it is one of the best managed companies in the sector.”

3. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Shareholders: 102

PayPal Holdings, Inc. is another stock that’s lost a lot of hedge fund ownership in recent years. 160 funds were long PYPL in Q3 of 2022, which had fallen to just 102 by the first quarter of this year. With the pandemic-related e-commerce tailwinds having subsided and mounting concerns about consumer spending in the near-term, it’s not surprising that many funds have been looking to park their money elsewhere for now.

That said, PayPal Holdings, Inc. is starting to look more attractive from a valuation perspective, with the stock now being 80% off its all-time highs. It may no longer be a high-growth stock, forecasting for just 7% revenue growth in Q2, but it does generate a solid amount of free cash flow, with a FCF yield that stands at 6%.

The Renaissance Large Cap Growth Strategy likes the easier upcoming comps for PayPal Holdings, Inc., as it discussed in its Q4 2022 investor letter:

“Another underperformer in the quarter was PayPal Holdings, Inc.. Despite reporting solid third quarter operating results and announcing new payment agreements with both Apple and Amazon.com, the company guided for a slowdown in e-commerce activity, partly reflecting weakened consumers who are dealing with heightened inflation. However, we still expect growth in PayPal’s core payments platforms to improve in upcoming quarters, driven by easier year-over-year comparisons.”

2. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Shareholders: 118

Hedge fund ownership of JPMorgan Chase & Co. rose by 15% during Q1, vaulting the company into second place on our list of the best spring stocks to buy now. JPMorgan has had remarkably steady levels of hedge fund ownership over the years, with no less than 92 and no more than 132 funds long the stock during any quarter over the past ten years.

One of the 15 Most Acquisitive Public Companies in the US, JPMorgan Chase & Co. has made more than 160 acquisitions since 2000, with its latest being the acquisition of First Republic after the lender was seized by regulators and sold to the investment bank. JPMorgan snagged a great deal in the FDIC’s rush to unload First Republic, acquiring about $18 billion in net assets for the $10.6 billion sticker price.

Giverny Capital made no qualms about JPMorgan Chase & Co. being the best-managed bank in America in its Q1 2023 investor letter:

“This quarter marked the end of our third year in business. It has been a wild ride – launching at the start of the pandemic, watching a bubble in low-quality stocks and cryptocurrencies inflate and deflate, and generally living with a high level of volatility. On April 14, our holding JPMorgan Chase & Co. announced nice earnings for the first quarter and the stock rose 7%. In a truly efficient market, the largest, best-managed bank in America would not rise or fall 7% on a single data point. Yet, we see it regularly.”

1. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Shareholders: 140

Mastercard Incorporated is one of hedge funds’ ten favorite stocks and another favorite of Warren Buffett. The Oracle of Omaha’s $1.45 billion stake in the company is outdone only by Charles Akre’s Akre Capital Management, which has a $2.13 billion position in Mastercard and nearly 19% exposure to the stock in the fund’s 13F portfolio.

Mastercard Incorporated continues to grow at an impressive clip, with processed gross volume dollar growth at 15% in Q1, down only slightly from 17% a year earlier. That lead to net revenue growth of 11% year-over-year at $5.7 billion, despite a 3 percentage point impact from unfavorable exchange rates. And with the global digital payments market expected to grow by more than 50% to $14.8 trillion by 2027, there’s no indication that Mastercard will slow down anytime soon.

Polen Global Growth Strategy considers Mastercard Incorporated a high conviction position, as it revealed in its Q1 2023 investor letter:

“We trimmed Mastercard Incorporated and Visa to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double-digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e-commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.

We have trimmed Visa and Mastercard because their combined weight grew to over 12% of the Global Growth Portfolio because of their recent performance and to fund our increase in Amazon’s position size. We added to both positions when their prices were depressed due to cross-border transactions deteriorating materially from the pandemic. Cross-border volumes came roaring back when travel corridors reopened, and although we are several quarters removed from the cross-border nadir, Visa still grew volumes >30% in 1Q23. Total cross-border volumes are now 132% of 2019 levels. At 4.5% each, both companies remain high conviction positions for Global Growth.”

Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. For more of the latest stock picks worth considering for your portfolio, check out Top Supersonic Travel Companies in the World and Top 20 Online Shopping Websites in USA in 2023.