Should You Fear Stocks on Friday the 13th?

Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) has historically outperformed on Friday the 13th, while Staples, Inc. (NASDAQ:SPLS) has struggled

May 12, 2016 at 3:09 PM
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Tomorrow is Friday the 13th -- a date that sends chills up the spines of countless horror film aficionados. And while Friday the 13th is bad luck for anyone pitching a tent at Camp Crystal Lake, it's actually been a boon for stocks. Below is a breakdown of how the S&P 500 Index (SPX) has performed anytime versus its returns on Friday the 13th, looking back to 1950. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White.

SPX 1 Friday 13

As you can see, the returns are relatively strong. On average, the SPX gains 0.08% on Friday the 13th, more than doubling the anytime return of 0.03%. The percent positive is slightly higher, as well. Below is a list of Friday the 13ths over the past decade, along with the S&P's single-day returns. Despite the overall historical outperformance, the broad-market index has suffered losses the last two times.

SPX 2 Friday 13

What about individual stocks? Below are two charts that answer that question. The first provides the best stocks to own on Friday the 13th, and the second provides the worst stocks. White used data from the past 20 occurrences -- or since 2005 -- to put together these lists. To qualify, each stock needed to have at least 10 returns.

best stocks Friday 13

worst stocks Friday 13

In the past two decades, the best stock to own on Friday the 13th has been Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA). Out of 15 returns, the shares have been positive 12 times, with an average gain of 1.6%. This would be more of the same for high-flying ULTA, which -- up 2.5% this afternoon at $207.84 -- is just a stone's throw away from its late-April record high of $212.92.

In fact, a repeat performance could lead to a short-squeeze situation for ULTA. During the last two reporting periods, short interest on the stock soared 70.5%, and now makes up nearly 7% of its float. In other words, there's sideline cash available to fuel further gains in ULTA shares.

By contrast, one of the worst stocks to own on Friday the 13th is fellow retailer Staples, Inc. (NASDAQ:SPLS). The shares have been positive just four times in the last 20 Friday the 13ths, with an average one-day loss of 0.5%. More recently, the stock has been bombing -- along with the much of the retail sector -- due to the disintegration of the company's merger plans. Down 1.8% at $8.31 this afternoon, the shares have surrendered one-fifth of their value in the past two sessions.

More losses could be in store, with the retailer set to report earnings next Wednesday morning. Over the previous eight quarters, SPLS has given up ground seven times after its earnings reports -- including the last five in a row. Short sellers have been hitting the decks of late, as short interest fell 22.2% in the latest reporting period. But a Friday the 13th loss and/or another negative earnings reaction could set off a renewed round of short-selling activity.

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