5 Phenomenal Stocks for May | The Motley Fool (2024)

An old adage says, "Sell in May, and go away." This strategy involves selling stocks at the end of April and then buying at the start of October or November. While this strategy has some merit, it doesn't hold true when the market is up from the start of the year to the end of April, at least from a backtest perspective.

Each year brings new scenarios, and with so many deals in the market, I don't think this strategy is wise, especially when considering these five stocks, which look like excellent buys now.

1. Meta Platforms

Meta Platforms (META 2.69%) operates Facebook, Instagram, Threads, WhatsApp, and Messenger. Its primary business is advertising, although it works with artificial intelligence (AI) and other virtual and mixed-reality products that can bring users into the metaverse. Meta is using generative AI to improve its advertising, as this tool allows advertisers to tailor their ads more specifically to the viewer.

While the products from its Reality Labs division aren't helping the company, they are exciting -- but not as exciting as Meta's advertising growth. In the first quarter, Meta's ad revenue rose 27% year over year to $35.6 billion. This accounted for a significant amount of Meta's $36.5 billion total revenue and played a huge factor in Meta's earnings per share (EPS) rising 114% to $4.71.

Despite that, Meta's increased spending received a lot of attention, which caused the stock to drop following earnings. At these levels, the stock trading at 22 times forward earnings looks like a great bargain.

2. UiPath

UiPath (PATH) makes robotic process automation (RPA) software, which allows its users to automate repetitive tasks. When combined with the power of AI, this expands the number of tasks the platform can automate, increasing its usefulness.

UiPath grew at a phenomenal pace during its fiscal fourth quarter of 2024 (ended Jan. 31), with annual recurring revenue rising 22% year over year to $1.46 billion. It's also crossing over into profitability, with Q4 becoming its first public quarter of generally accepted accounting principles (GAAP) profitability.

PATH Operating Margin (Quarterly) data by YCharts

The global market opportunity of RPA software is expected to grow at a nearly 40% compound annual rate from 2023 to 2030, reaching a market size of nearly $31 billion. With UiPath being a key player in this space, it's set to capitalize on the growth, making it a fantastic investment now.

3. Procore

Construction sites have long been devoid of any sense of digitalization. That's because internet infrastructure wasn't powerful enough to reach disconnected job sites. That's no longer the case, and construction management software like Procore Technologies (PCOR 3.54%) is seeing strong demand.

Procore creates a single point of truth for all stakeholders in a construction project. This helps reduce rework costs and gives managers a better idea of how a project is flowing.

Procore has seen high demand for its software, and its revenue rose 26% year over year to $269 million in Q1. It's not as mature as Meta or UiPath, so it's not profitable. However, its losses have steadily decreased, and Procore is now within spitting distance of becoming profitable.

With how large of an industry construction is, Procore is a no-brainer buy, as there are still many clients to onboard.

4. dLocal

dLocal (DLO -1.28%) provides a vital service to many commerce giants. It has a long list of top-tier clients, including Amazon, Shopify, and Nike.

dLocal helps retailers do business in emerging market economies, as the financial systems of these countries often aren't set up like those in the U.S. This would require special systems to be developed in each country, which could outweigh the cost of actually operating in those countries. However, dLocal already did the legwork in many countries, so commerce giants only need to divert a small amount of revenue to dLocal in exchange for using its products.

This has been a lucrative business for dLocal, and its growth supports this. In Q4, revenue rose 59% year over year to $188 million, and its EPS rose by 43%.

DLO Revenue (Quarterly) data by YCharts

dLocal is a mid-cap stock that many haven't discovered yet and trades for a mere 23 times forward earnings despite its growth. Investors should use this time to get into the stock before it gets more popular.

5. MercadoLibre

MercadoLibre (MELI 4.61%)is a Latin American commerce giant. MercadoLibre has often been referred to as the "Amazon of Latin America," but it's so much more. In addition to its commerce site and logistics network, it also has a thriving fintech wing.

MercadoLibre posted strong growth for a while, and Q1 was no exception. Revenue increased by 36% in Q1 but when currency effects are accounted for, revenue rose 94%. Looking at the individual segments, commerce revenue increased by 113% on a currency-neutral basis, and fintech rose by 74%.

Its profitability is also rising, as its net income margin rose from 6.3% last year to 7.9% this year.

Despite that success, MercadoLibre's stock doesn't carry a premium price tag and the company has the luxury of operating in the rapidly expanding Latin American geography. As a result, MercadoLibre is a great stock to buy now and hold for many years.