Stocks to Short Before September

PCG and AIG stocks could slump next month, if past is prologue

Aug 29, 2018 at 2:18 PM
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The month of September has historically been rough for the S&P 500 Index (SPX). While these 25 stocks tend to buck the broad-market trend lower, below is a list of stocks that tend to struggle in the month. Among them are utilities provider PG&E Corporation (NYSE:PCG) and insurance issue American International Group Inc (NYSE:AIG).

Looking back 10 years, the 25 stocks below have averaged the worst monthly returns in September. PCG is the only stock on the list that's finished the month higher just 10% of the time, averaging a loss of 1.65%, per Schaeffer's Senior Quantitative Analyst Rocky White. AIG stock, meanwhile, has racked up the second-highest average monthly loss, dropping 9.39%, and finishing September higher just 30% of the time.

worst september stocks

PCG Stock Running Into Familiar Ceiling

PG&E shares are higher today, after Guggenheim upgraded the stock to "neutral" from "sell," and hiked its price target to $50 from $35. The analyst is optimistic about a legislative proposal that includes the opportunity to recover California wildfire costs via securitization bonds. At last check, PCG is up 1.4% to trade at $46.29.

From a longer-term perspective, the equity gapped lower in late December after the company suspended its dividend in the wake of the wildfires. Since then, the stock has bounced around between $38 and $48, and is at the upper end of that range currently. Another dose of seasonal headwinds could have PCG stock backpedaling in the face of a familiar ceiling.

PCG stock chart aug 29

New Lows in Store for AIG in September?

American International Group stock has been chopping lower for most of 2018, surrendering more than 9% so far year-to-date. More recently, AIG shares have run into a wall in the $54-$54.50 neighborhood -- where the security was trading before an early August post-earnings bear gap. Beyond that, the $55-$56 region has contained breakout attempts since a bear gap in early May. At last check, AIG was fractionally lower at $54. Another 9.39% drop next month would put the equity south of its May 3 annual low of $49.57.

AIG stock chart aug 29

Despite AIG's struggles, the majority of analysts still recommend buying it, and the average 12-month price target among this group represents a 15% premium to current levels. A round of overdue downgrades and/or price-target cuts could exacerbate seasonal headwinds.

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