The ASX 200 gained 1.88% in May, but the best performing stocks for the month easily outshined the index. Here are the top performing stocks in May 2021:
As for Australia’s biggest companies by market cap, it was a bit of a mixed bag with some companies making respectable gains and while others made losses.
Australian and New Zealand Banking Group Ltd (ASX:ANZ)
The big news for ANZ this month was a AU$1 billion capital raising via the issue of capital notes (ANZ Capital Notes 6). The offer opens to eligible shareholders and holders of ANZ Capital Notes 1 at $100 per security on 9 June and closes 30 June 2021. In May, ANZ shares fell by around 7.7% by mid-month and was looking weak, before it managed to find support to rise, closing just 0.55% down at month’s end. If ANZ trades below $27.50 there is a risk of a further fall to between $25 and $26.
BHP Group Ltd (ASX:BHP)
BHP traded up around 9% in early in May to $51.82, however, commentary indicating that commodity prices were overheated and news of China’s plans to increase their own self-sufficiency of iron ore supply saw the price of BHP fall to $47.85 at month end. The current forecast indicates BHP may continue the current rise to around $54 in 2021 and early in June the signs are good as the share price has risen strongly to $49.35. However, if the current upward price move in BHP is a false rally and it falls away to pull back below $47.76 in June a further fall could be on the cards.
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Commonwealth Bank of Australia (CBA)
CBA is one of two most reliable Australian banks for paying dividends to investors. But it is not just dividends that has created investor support for the stock. In May 2021, CBA traded above $100 which demonstrates the confidence investors have in CBA. CBA’s share price closed up 11.5% last month to $99.72 and price has continued to rise with the stock now trading above $100. There is a chance the rise will slow in coming weeks as short-term profit takers may exit this stock.
CSL Limited (ASX:CSL)
CSL’s share price has been held back by a fall in plasma collections during COVID. In recent months levels have risen and this pushed the share price higher. In May the stock closed up 6.5% and is currently trading well above the significant low of $242 set in March 2021, with the stock looking good. So far in June the share price has fallen slightly, however, this move could be temporary.
Fortescue Metals Group Ltd (ASX:FMG)
The price of iron ore has been rising strongly and in May it achieved a price in excess of US$200, which is great news for FMG shareholders. In a presentation to the Australian Shareholders Association in May, FMG announced C1 production costs of US$14.90 per ton and other performance metrics appeared in line with forecasts. Still, FMG is currently down around 11% from the all-time high of $26.40 in January 2021 and while there is a short-term risk of a further fall, provided price holds above $22 FMG could rise later in 2021.
Macquarie Group Limited (ASX:MQG)
MQG is a solid investment bank and often tightly held by retail investors. The bank gained in popularity during the Royal Commission when the big four faced most of the scrutiny for major breaches. While the bank’s share price is at times more volatile than the other major banks it’s share price generally recovers faster after a fall. Previous analysis indicated MQG’s price would fall below $150 and MQG traded to $147.60 on 24 May. MQG may rise to $156 in June, however, downside risk still exists.
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National Australia Bank Limited (ASX:NAB)
NAB is currently trading at levels it achieved in 1999 and is the worst performing bank over the past 20 years. NAB was sold down heavily during the Royal Commission and at the start of the COVID-19 pandemic with the stock falling 65%t from it’s high in April 2015. NAB has the potential for further growth in 2021 rising to between $29 and $33 and is now starting to look good as in the past month it has gained 0.75%.
Westpac Banking Corporation (ASX:WBC)
WBC has felt the strain of the Royal Commission, the COVID pandemic and stories of impropriety. In a good sign last month Westpac CEO announced plans to cut $2 billion from the banks cost base in coming years. Since April’s close at $24.98, Westpac rose approximately 5.7% in May and has continued slightly higher in the first week of June. Westpac is expected to continue to recover albeit slowly with the current forecast for a temporary peak in price between $26 and $28 in June.
Wesfarmers Limited (ASX:WES)
The first week in June WES released a long awaited in-depth investor presentation to provide investors with an understanding of where the company is heading. Although the stock price initially rose to $56.67, the day of the presentation, by the close WES had fallen by approximately 2.1% from the prior day’s close of $56.28. We believe this is nothing to be concerned about as WES rose by around 2.4% in May, which was a good performance when compared to other stocks on the list.
Woolworths Group Limited (ASX:WOW)
WOW closed up at $41.62 by the end of May, representing a rise of 5.23% for the month and this has continued into the first week of June. Announcements by WOW of an increase in its shareholding in advanced analytics company Quantium and news of its stand-alone payments system WPay, is a move the market appears to like and is supporting the current growth in the stock’s price. WOW is expected to continue to rise above the pre-COVID high of $43.96 in February 2020, that said the faster WOW rises now the greater the risk of a reversal once price is above the high.
Thinking of investing?
The past year has seen a number of stocks boom and reach new heights, which can be quite alluring for some investors. However, it is always best to do your research and bear in mind that past performance is not an indicator of future performance. Check out our article on how to pick stocks.
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