The old adage of 'sell in May and go away' may not be the case in 2015. May was a fairly average month for Australian investors but by no means a disaster, as the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) fell 0.22% over the month, led by declines in the big banks and resources companies.
REA Group Limited (ASX: REA) led the way with an 18% fall, while Westpac Banking Corp (ASX: WBC) was a close second, recording a 10% fall.
May's Big Winners
The big winners in the month of May were expert stock pickers that were able to see profit upgrades coming and investors in companies exposed to a falling Australian dollar, as the dollar fell 3% against the US dollar over the month.
James Hardie Industries plc (ASX: JHX) led the way for the month, recording a 23% rise to $17.77, an all-time high for the building products supplier, following a bumper half and dividend boost.
Cimic Group Ltd (ASX: CIM) and Aurizon Holdings Ltd (ASX: AZJ) rose 10% each for seemingly no particular reason, other than perhaps investors switching away from yield stocks.
Incredibly, Qantas Airways Limited (ASX: QAN) and QBE Insurance Group Ltd (ASX: QBE) continued their ripper years by surging another 9% and 7.5% respectively to take their year-to-date gains to 153% and 30%! Qantas stands to benefit from a lower Australian dollar and fuel costs, while QBE is getting a boost because it hasn't announced a profit downgrade!
In the mid and small-cap space, investors were rewarded with some HUGE gains. Blackmores Limited (ASX: BKL) rose 30% after it reported a 54% rise in net profit to take its year-to-date share price rise to over 120%.
The real star of the month though, was Prima BioMed Limited (ASX: PRR) which surged 335% to take it's market cap above $170 million as investors got excited about the prospect of a successful ovarian cancer trial.
June?
Will the iron ore price recover? Will Fortescue Metals Group Limited (ASX: FMG) be acquired by Chinese suitors? Perhaps QBE will downgrade profits, or Qantas will announce that it's moving into consumer finance?
We really don't know! So the best way for investors to prepare for June is to own a collection of great companies purchased at great prices. This methodology has been championed for years by the great Warren Buffett and has proved to be extremely successful so far. His methodology has allowed investors to minimise downside during corrections and maximise upside in booms.
