Traditionally, the term “January Effect” was used to explain a seasonal anomaly where the stock market had a tendency to rally during the month of January. However, the analysts at Deutsche Bank find that this anomaly has long since been arbitraged away by market efficiencies. While new 401(k) and IRA money does start to flow back in, many managers become net sellers at the start of the year.

The Quantitative research team at Deutsche Bank has put together a list of stocks to buy that should benefit from early trading strategies in 2014. They see the January Effect as an alpha opportunity rather than a seasonal hindrance. With current market indices at all-time highs, profit taking strategies such as reversal may be an opportune choice for investors looking for an early year head start in performance. Here are the stocks that may be just the ticket to start the new year off.

American International Group Inc. (NYSE: AIG) has risen from the ashes of the 2008 meltdown and is back strong as ever. The stock is ranked as the third largest holdings at hedge funds after Apple Inc. and Google. Investors are paid a small 0.8% dividend. The Thomson/First Call price target for this top stock is $55. AIG closed Friday at $49.55.

Archer Daniels Midland Co. (NYSE: ADM) makes the list and is also one of the top 10 stocks to buy for 2014 at Merrill Lynch. Investors are paid a 1.8% dividend. The consensus price target for the agricultural giant is $43. ADM closed Friday at $41.94.

Booz Allen Hamilton Holding Corp. (NYSE: BAH) recently completed a successful secondary stock offering to raise additional cash. Friday the company was awarded an $18.1 million extension to its contract to perform systems engineering and integration support of the U.S. Air Force Range and Network Division, Space and Missile Systems Center’s Launch and Test Range System. This contract will now run through Dec. 7 of next year. Shareholders receive a solid 2.3% dividend. The consensus price target is posted at $21.50. The stock closed Friday at $17.51.

Hartford Financial Services Group Inc. (NYSE: HIG) is a top financial name that may provide investors with solid January gains. The company provides insurance and financial services to individual and business customers, primarily in the United States and Japan. Investors are paid a 1.7% dividend. The consensus price target for the stock is set at $39. The stock closed Friday at $35.94.

L3 Communications Holdings Inc. (NYSE: LLL) is another top defense contractor that could be poised for a big 2014. Last Tuesday the company was awarded a $22.9 million option exercise to manufacture, test, deliver and support four AN/SRQ-4 and 31 AN/ARQ-59 Common Data Link Hawklink radio terminal sets to be installed aboard MH-60R Sikorsky helicopter aircraft. Work on this contract is expected to extend through September 2017. Investors are paid a 2.2% dividend. The consensus price target is set at $102.50. Shares closed Friday at $101.80.

McKesson Corp. (NYSE: MCK) is a top health care name to make the Deutsche Bank list. Although McKesson plays in the health care info tech space, the lion’s share of its revenue comes from pharmaceutical distribution. This is expected to be a large growth area going forward with an aging population. The consensus number price target for the stock is posted at $175. McKesson closed Friday at $162.81.

Rite Aid Corp. (NYSE: RAD) is back from the dead and actually made money last quarter. The stock is up 318% since last January. Rite Aid’s gains have largely come from one thing: The drugstore chain managed to avoid the all-out collapse that many investors have expected for years. Prior to the stock’s strong performance in 2013, Rite Aid shares were stuck in the $1 to $2 range for years following the financial crisis. The consensus price target for the stock is $6. Rite Aid closed Friday at $5.75.

Scotts Miracle-Gro Co. (NYSE: SMG) may be a tough name to warm up to as we shiver around the country with winter weather. The short interest in the stock has dropped dramatically over the past quarter. Investors may be seeing a strong year ahead. Shareholders receive a very solid 3% dividend. The consensus price target is $57, and Scotts closed Friday higher at $60.26.

Questcor Pharmaceuticals Inc. (NASDAQ: QCOR) has been absolutely on fire this year. The stock has pulled back more than 20% in the past three months and short-sellers may be covering. The Federal Trade Commission (FTC) has been reviewing the company, which may have accounted for the stock price drop. With almost 30% of the stock currently sold short, any positive news could help it rip higher. The consensus price target for the stock is $84.50. Questcor closed Friday at $52.63. A move to the target would represent a huge 60% gain for investors.

Quantitative trading models have the ability to offer investors solid stocks to buy, as they are based on years of data and past trading patterns. The current bull market run has gone a long way without a significant correction, and in a mid-term election year there can always be volatility. The Deutsche Bank ideas that focus on success in January may prove to be a strong tactic for 2014.

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