Why These 2 Stocks Could Surge in November

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) and McDonald's Corporation (NYSE:MCD) are among the best November stocks over the past decade

Oct 30, 2015 at 12:42 PM
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With the start of November around the corner, we are heading into the most bullish time of the year. Add to that a sentiment landscape that's beginning to tilt in a more optimistic direction, and we could be on the brink of a breakout. Amid this backdrop, I decided to ask Schaeffer's Senior Quantitative Analyst Rocky White for historical data on stocks that tend to outperform during the month of November, and he supplied the chart below. Two names of particular interest on that list are drugmaker BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) and fast-food juggernaut McDonald's Corporation (NYSE:MCD).


BioMarin Pharmaceutical Inc. (NASDAQ:BMRN)

BMRN has been stellar in November, historically speaking. During the past decade, the stock has advanced eight times, averaging a single-month gain of 7.8%. A repeat performance would be more of the same for an equity that's surged 27.8% year-to-date to trade at $115.50, and is on the verge of hurdling its 50-day moving average for the first time since mid-August. Today, BMRN has advanced 1.5%, thanks to a narrower-than-expected third-quarter loss and an upwardly revised full-year sales forecast.


Despite the stock's technical success, a fair share of skepticism persists on Wall Street. BMRN's Schaeffer's put/call open interest ratio (SOIR) stands at 0.92, higher than four-fifths of comparable readings from the past year. In other words, short-term speculators are more put-skewed than usual toward the equity. What's more, short interest has been on a gradual rise, popping almost 9% during the latest reporting period. Should these doubters begin to throw in the towel amid BMRN's upward momentum, the shares could catch a tailwind.

McDonald's Corporation (NYSE:MCD)

MCD has also fared well on the charts, sporting a 2015 lead of more than 20% to hover near $112.83. In fact, the shares are just a chip-shot away from their all-time high of $113.96, touched on Monday. The stock could soon topple that milestone, considering it's advanced in nine of the previous 10 Novembers, with an average gain of 2.2% -- including a 3.3% jump last year.


What could potentially bolster MCD's returns is an unwinding of pessimism on the Street. For one, the equity's 10-day put/call volume ratio of 0.83 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks near the top quartile of its annual range. Echoing this, its SOIR of 0.77 rests 2 percentage points from a 52-week peak. If these doubters hit the eject button, MCD could benefit.

Furthermore, over half of the analysts tracking the shares rate them a "hold" or worse. Plus, MCD's consensus 12-month price target of $114.62 is well within striking distance. This leaves the door open to future upgrades and price-target boosts, which could intensify buying power.

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