Masco Stock Among Worst Stocks to Own in April

With the month of March wrapping up, we're heading into the final month of what's traditionally considered the most bullish time of the year for stocks. That doesn't mean April will bring gains for everyone, though. Schaeffer's Senior Quantitative Analyst Rocky White compiled the following table with the 10 worst performers on the S&P 500 Index (SPX) during the month of April over the past 10 years. While the list of laggards is heavily populated with finance names, a different stock popped out at us: Masco Corp (NYSE:MAS). Not only have shares of MAS historically faltered in April, but the building stock also appears among the worst performers in the second quarter.

Masco Stock Set to Slide if Past is Precedent

Over the past decade, MAS has finished April higher only twice, and has ended the month with an average return of just 0.1%. But history suggests the losses could get even worse from there. The equity has averaged a 2.6% loss over the whole second quarter, positive only 30% of the time over the past 10 years. And at $33.82, MAS shares are down 9.5% from their July highs, but optimism remains high. 

Analyst Downgrades, Rising Short Interest Could Sink MAS Stock

Starting with the brokerage bunch, 10 analysts currently recommend buying the shares, while three rate MAS a "hold," and not one calls it a "sell." A round of downgrades from analysts could send the stock sliding. Meanwhile, short interest levels aren't far off the record lows seen just over a month ago, currently representing less than 2% of the security's total float. The shares could be in trouble should these bearish bets start piling up.

Options Traders Favor Bullish Bets; Premium Can Be Purchased on the Cheap

In the options pits, absolute volume tends to run light. In fact, total open interest on MAS options is seated in the low 8th annual percentile, with fewer than 28,000 contracts outstanding. But the action in recent months has been strongly skewed to the call side. In fact, over the past 50 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators purchased 18.69 calls for every put.

It could be an appealing time for short-term options traders to place fresh bets on Masco Corp (NYSE:MAS), though. The stock holds a Schaeffer's Volatility Index (SVI) of 18% -- lower than 98% of all comparable readings taken in the past 12 months. Simply put, MAS' near-term options are currently pricing in historically low volatility expectations.