Restaurant stocks Chipotle Mexican Grill, Inc. (CMG), Jack in the Box Inc. (JACK), and Starbucks Corporation (SBUX) have historically outperformed in March
Earlier today, we highlighted the
bullish time of year we're entering, as the period from March through May has historically been strong for stocks. Picking up on that theme, let's look at three stocks that have outperformed during the month of March over the past decade -- restaurateurs
Chipotle Mexican Grill, Inc. (NYSE:CMG),
Jack in the Box Inc. (NASDAQ:JACK), and
Starbucks Corporation (NASDAQ:SBUX).
Below, you'll find a list of the best March stocks, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Underneath it is additional commentary on CMG, JACK, and SBUX, breaking down their technicals and surrounding sentiment on Wall Street. To qualify for the list, each stock either needs to trade at least one million shares per day and/or weekly options, and cost at least $8 per share as of Friday's close.
Chipotle Mexican Grill, Inc. (NYSE:CMG)
CMG has a sensational March track record, advancing 90% of the time in the previous 10 years, with an average gain of 8.8%. The lone exception? Last year, when the stock lost 2.2%.
More recently, CMG has been bouncing back since hitting a two-year low of $399.13 in early January following
a flurry of food-borne illness incidents. Today, the shares are 1.3% higher at $512.57, after BofA-Merrill Lynch raised its price target on CMG to $570 from $475.
In the options pits, traders have been placing bullish bets on CMG at a faster-than-usual pace of late. The stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 1.12 ranks in the 88th percentile of its annual range.
Jack in the Box Inc. (NASDAQ:JACK)
JACK has advanced in nine of the prior 10 Marches, with an average return of 5.8%. That would be a welcome sight for shareholders, as the stock is still trying to recover from a mid-February,
post-earnings bear gap -- last seen at $69, compared to a Feb. 17 pre-earnings closing price of $76.91. In 2015, however, the shares slipped 0.8% during the month of March.
Option traders are bearishly arrayed toward JACK. At the ISE, CBOE, and PHLX, the stock's 50-day put/call volume ratio of 1.50 outstrips 87% of all others from the past year. Likewise, JACK's
Schaeffer's put/call open interest ratio (SOIR) of 1.27 registers in the 84th annual percentile, with puts outstripping calls among short-term options. If the stock can snap back next month, a
capitulation among skeptical option players could create tailwinds.
Starbucks Corporation (NASDAQ:SBUX)
Finally, SBUX recently took back its 40-day moving average after tumbling below it in early February. For the past few sessions, this trendline has acted as support, which could signal another strong March for the shares. Historically, SBUX has posted a positive return in nine of the previous 10 years, tacking on 6.6%, on average. Based on the chart below, the stock -- last seen 0.7% higher at $58.75, following news it is
opening its first store in Italy -- hasn't had a negative March since 2008.
If past is precedent, SBUX
option bears could soon start feeling the heat. During the past two weeks, the stock has amassed a put/call volume ratio of 0.93 across the ISE, CBOE, and PHLX -- qualifying in the 87th percentile of its annual range. Suffice it to say, a capitulation among these doubters could add fuel to SBUX's fire.