“Buying the New Year Re-Rating”
As we move into the final stretch of 2025, the “Santa Claus Rally” typically hands the baton to the January Effect. For our year-end transition, we will focus on a mix of industrial powerhouses, infrastructure leaders, and “New Year” consumer plays.
As we enter 2026, the market is bracing for a “Year of Execution.” What this means essentially, is the market’s shift in focus. After years of volatility, rate hikes, and speculative narratives, 2026 is framed as a period where investors will reward companies that can actually deliver—on earnings, margins, infrastructure projects, and operational efficiency.
With the Federal Reserve expected to hold rates steady for much of the year, institutional focus is shifting toward operating leverage. In other words, this refers to companies’ ability to grow profits faster than revenues once fixed costs are covered. In a steady-rate environment, firms that can demonstrate strong operating leverage are attractive because they can expand margins without relying on cheap financing. Additionally, institutional flows in the market will consider government-funded infrastructure spend. Because interest rates are expected to remain stable, big investors are shifting their attention to companies that can deliver real profit growth through efficiency and infrastructure-driven demand.
The following five picks represent the strongest intersection of historical seasonality and 2026 fundamental tailwinds.
- Seasonal Win Rate:91% (Login to SuperSeasonals.com for the exact dates and in-depth statistics).
- The Why: Retailers spent Q4 depleting inventory; January is when they restock. As an LTL (Less-Than-Truckload) leader, XPO is the first to feel this surge.
- 2026 Outlook: Analysts have recently pushed price targets into the $160s, citing XPO’s industry-leading tech integration which is expected to drive record margins in 2026.
- Action: Look for the “Budget Reset” buy-in during the first week of January.
- Seasonal Win Rate:00% (Login to SuperSeasonals.com for the exact dates and in-depth statistics).
- The Why: Building material stocks are classic “early cycle” movers. Investors front-run the spring construction season during the winter months.
- 2026 Outlook: With a 2026 earnings growth forecast of 14%, CRH is a primary beneficiary of the ongoing onshoring trend and government-funded infrastructure projects hitting full stride this year.
- Action: CRH’s 10 out of 10 technical rating makes it a “buy-on-dips” candidate through December.
- Seasonal Window: (Login to SuperSeasonals.com for the exact dates and in-depth statistics).
- The Why: While holiday spending happens in December, the processing fees and reconciliation peak in the following months. Additionally, Q1 is a peak window for high-margin international travel bookings.
- 2026 Outlook: Visa processed roughly $15 trillion in volume last year. In 2026, as inflation stabilizes, real consumer spending power is expected to drive transaction counts higher, making Visa a “core” institutional allocation for the new year.
- Seasonal Window:(Login to SuperSeasonals.com for the exact dates and in-depth statistics).
- The Why: January 1st marks the start of new healthcare plan enrollments. Historically, the stock catches a “Bottom Bounce” as investors move past the uncertainty of the previous year’s medical loss ratios.
- 2026 Outlook: Trading at a P/E of 18x (well below its 22x average), UNH is viewed as a “value coiled spring” for 2026. With earnings slated for January 27th, the seasonal window often sees a pre-earnings “run-up” as analysts re-calculate enrollment growth.
- Seasonal Win Rate:48% (Login to SuperSeasonals.com for the exact dates and in-depth statistics).
- The Why: Housing stocks trade on sentiment before sales. Investors buy builders in January to capture the “Spring Selling Season” hype before a single house is even sold.
- 2026 Outlook: Despite recent caution from analysts regarding margins, Lennar is still forecast to grow EPS by 1% in 2026. It remains the most liquid and defensive play in the homebuilding sector during volatile Q1 transitions.
| Ticker | Conviction Level | Primary Seasonal Driver | Key 2026 Catalyst |
| XPO | High | Inventory Restocking | Margin Expansion via Tech |
| CRH | High | Spring Construction Front-Run | 18% Forecasted EPS Growth |
| V | Moderate/High | Travel & Spending Settlement | Stabilizing Consumer Credit |
| UNH | High | New Enrollment Cycle | Mean Reversion to 22x P/E |
| LEN | Moderate | Spring Selling Sentiment | Defensive Sector Dominance |
Seasonality is the “wind at your back,” but fundamentals are the “engine.” This Q1 2026 mix balances the raw power of XPO and CRH with the defensive stability of UNH and Visa. I’d likely recommend scaling into these positions before the “January Barometer” takes effect—because as January goes, so goes the year.
Please keep in mind, this report relies heavily on historical backtesting to uncover potential seasonal patterns. That said, history is a map, not a crystal ball. Do your homework, seek advice from a licensed financial professional, and fully understand the risks before investing in the markets.
Trade Smart,
Chad Shirley
