25 Stocks to Avoid in May

JWN stock has racked up the steepest average May loss

by Andrea Kramer

Published on Apr 30, 2019 at 1:57 PM
Updated on Apr 30, 2019 at 1:58 PM

The major stock market indexes are set to wrap up April with solid gains, with the S&P 500 Index (SPX) on pace for a monthly win of 3.65% -- a fourth straight monthly gain. However, while we don't necessarily buy into the old "Sell in May and go away" adage, several stocks could move lower next month, if recent history is any indicator. Among the equities that tend to suffer in May is department store concern Nordstrom, Inc. (NYSE:JWN), which is already set for its worst month of 2019.

Below are the 25 worst stocks to own in May, looking back 10 years. In order to make the list, the shares had to have at least eight years' worth of historical returns, per Schaeffer's Senior Quantitative Analyst Rocky White.

worst May stocks

Nordstrom has racked up the steepest average loss on the list, dropping roughly 6.5% in May. Further, over the past decade, JWN has ended the month higher just twice.

As alluded to earlier, the security is on track for an April loss of 7.8%, which would mark its worst month since December. In fact, JWN touched an annual low of $40.12 on April 26, as retailers sold off on Amazon's (AMZN) one-day delivery plans. From a longer-term perspective, Nordstrom stock has been in a downtrend since a massive bear gap in November, and recently breached support in the $43-$44 area. From the equity's current perch of $40.98, another 6.5% drop in May would put JWN back around $38.32 -- territory not charted since late 2017.

JWN stock chart april 30

Traders looking to speculate on the retail stock's short-term trajectory are in luck; JWN's near-term options are attractively priced right now. The equity's Schaeffer's Volatility Index (SVI) of 32% registers in just the 9th percentile of its annual range, suggesting short-term options are pricing in relatively low volatility expectations for the shares. This, even with potential catalysts that could move the stock in May, including the company's quarterly earnings release (May 21) and annual shareholder meeting (May 23).


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