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July Stock Laggards: Sirius XM Holdings Inc., Advanced Micro Devices, Inc., and NVIDIA Corporation

SIRI, AMD, and NVDA have historically underperformed in the month of July

by 7/2/2014 1:03:59 PM
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Schaeffer's Quantitative Analyst Chris Prybal ran a study to determine which stocks tend to perform poorly during the month of July. Among the names that average a loss of 4% or more during the month are satellite radio kingpin Sirius XM Holdings Inc. (NASDAQ:SIRI), semiconductor specialist Advanced Micro Devices, Inc. (NYSE:AMD), and PC graphics concern NVIDIA Corporation (NASDAQ:NVDA).

SIRI averages a loss of 6.6% in July, looking back over the past 19 returns. The stock ends the month higher less than half the time, with only 47% positive performances. Currently, SIRI is trading at $3.45 -- just below the $3.50 level. This former area of support has more recently been acting as resistance, and a pullback from this region could lead to another negative July for the stock.

Looking ahead, Sirius XM Holdings Inc. is tentatively scheduled to report second-quarter earnings during the fourth week of July. Expectations appear to be low for the quarterly results, as short interest on SIRI ramped up by 60.1% during the past two reporting periods. Now, these bearish bets represent 11.1% of the equity's float.

With 39 July returns on record, AMD has managed to average a monthly deficit of 5.3% -- and the stock ends the month on positive ground only 36% of the time. As with SIRI, the shares of AMD appear to be entering July at a technical disadvantage. The stock is currently trading at $4.32, just south of stubborn resistance in the $4.40-$4.60 neighborhood.

Advanced Micro Devices, Inc. is slated to announce its second-quarter earnings after the market closes on Thursday, July 17 -- shortly before July-dated options are due to expire. Ahead of the event, bearish options have been popular on AMD. During the past 10 days, the stock has racked up a put/call volume ratio of 0.94, according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio arrives in the 95th percentile of its annual range, not far from a pessimistic peak.

Elsewhere in the tech sector, NVDA has swallowed an average loss of 8.1%, looking back over the past 15 July returns. The stock has managed a positive finish to the month only 40% of the time. Currently, NVDA is docked at $18.74, and has been lodged in a narrow range between $17.60 and $19.60 since mid-February.

In light of the stagnant price action in NVIDIA Corporation shares, it's no surprise to find plenty of skeptics betting against the stock. Short interest accounts for a notable 9.4% of the equity's float, and 64% of analysts tracking NVDA maintain a "hold" or "sell" rating.

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