Q2 STOCKS TO BUY

Best and Worst Stocks After Labor Day

UAA and PPL stocks tend to make notable moves in the short holiday week

Aug 28, 2019 at 11:02 AM
facebook X logo linkedin


U.S. stock markets will be closed on Monday, Sept. 2, for Labor Day. Ahead of the unofficial end to summer, we decided to take a look at the best and worst stocks to own during the shortened holiday week, historically. One equity that could jump is retailer Under Armour Inc (NYSE:UAA), while utilities concern PPL Corp (NYSE:PPL) could be a short-term bearish target.

Below have been the 25 best S&P 500 (SPX) stocks to own during Labor Day week, looking back 10 years. Stocks had to have at least eight years' worth of returns to make the list, which was cultivated by Schaeffer's Senior Quantitative Analyst Rocky White. As you can see, UAA stock has generated one of the healthiest average returns, at 3.9%, and has ended the week higher 80% of the time.

best stocks after labor day

Under Armour stock gapped lower after earnings in late July, but seems to have found support around the $17-$18 region. This area is home to UAA's year-to-date breakeven point, and contained the stock's downside back in October. At last check, the shares were trading at $17.99 -- another 3.9% rebound next week would put them at $18.69.

A significant bounce could certainly spook a few short sellers. Short interest represents nearly 20% of the security's total available float, or about eight days of pent-up buying demand, at the retail stock's average pace of trading.

Traders expecting another post-holiday rebound for UAA should consider speculating with options. The equity's Schaeffer's Volatility Index (SVI) of 41% sits higher than just 18% of all other readings from the past year, suggesting near-term options are attractively priced at the moment.

Meanwhile, below have been the 25 worst SPX stocks to own during Labor Day week, looking back a decade. Again, stocks had to have at least eight years of returns in order to qualify. At the top of the list is PPL stock, which is one of only two equities with just a 20% positive rate for the short week. On average, PPL shares have surrendered 1.16% the week of Labor Day.

worst stocks after labor day

PPL has been in a channel of lower highs and lows since June. The stock is attempting to find a floor in the $29 area, and earlier this month fell as low as $28.55 -- near its year-to-date breakeven level.

As with UAA, PPL shares are also popular among short sellers. Short interest represents just 5% of the security's total available float, but the nearly 35 million shares sold short would take nine sessions to buy back, at the equity's average pace of trading. Of course, if PPL continues its trend of weak post-Labor Day performance, it's doubtful shorts will be spooked into scrambling.

Investors expecting more short-term downside for the equity could pick up options at a relative bargain. PPL's SVI of 19% is in the bottom third of its annual range, meaning the equity's front-month at-the-money options have priced in lower volatility expectations just 33% of the time during the past year.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter