The historically best stocks to own in the month of February
Although U.S. stocks are down today, it's been a stellar start to 2018, with the major market indexes still pacing for their best month in years. With February around the corner, we decided to take a look at some stocks that could outperform next month, if past is prologue. Below is a list of 25 stocks to buy now, if history is any indicator, with travel stock Priceline Group Inc (NASDAQ:PCLN) leading the pack.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, PCLN stock has been perfect in the month of February, looking back 10 years. It's the only S&P 500 stock to bat 1,000 for the month -- considering only equities with at least eight years of data -- and the shares also boast the highest average return of all, up 14.11%.
Disappointing guidance sent Priceline stock gapping lower in early November, with the shares temporarily dipping beneath the $1,650 level. Since then, however, the security has rallied more than 17%, and last week nearly skimmed the $1,985 level -- its highest point since gapping lower on a soft profit forecast in August -- before taking a breather. At last check, PCLN shares were down 0.9% at $1,932.82; another 14.11% rally from current levels would place the security around $2,205.54 at the end of February -- a new record high.
Despite PCLN's January gain of 11.45% -- on pace for its best month since February 2016 -- options traders have been buying to open puts over calls at a rapid-fire rate. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.17 is in the 88th percentile of its annual range. An unwinding of pessimism in the options pits could push Priceline shares even higher.
However, some of the recent put buying could be attributable to Priceline shareholders looking to lock in gains in the event of a pullback. By purchasing to open protective puts, the buyers can secure an attractive price at which to sell their shares, should PCLN stock take a turn for the worse.
Whatever the motive, the stock's short-term options are attractively priced right now. PCLN sports a Schaeffer's Volatility Index (SVI) of 20% -- in the 22nd annual percentile, suggesting near-term options are pricing in relatively muted volatility expectations right now.