One oil stock, in particular, tends to have a rough month
We recently outlined the 25 best stocks to own in September, historically, with Southwest Airlines (LUV) enjoying some of the best returns over the past decade. Today, however, we're taking a look at the stocks that tend to slide in September, with oil-and-gas concern Marathon Petroleum Corp (NYSE:MPC) logging the steepest average loss of all eligible S&P 500 Index (SPX) stocks.
Below are the 25 worst stocks to own in September, looking back 10 years, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. As you can see, MPC has averaged a monthly loss of 5.28%, and has ended September higher just a quarter of the time.
Marathon Petroleum stock has spent 2019 in a channel of lower highs and lows, with rally attempts stalling around its 120-day moving average. The security touched an annual low of $43.96 earlier this month, and was last seen trading around $49.09. Another 5.28% drop from current levels would put MPC around $46.50 heading into October.
Despite dropping more than 40% over the past year, MPC remains beloved among analysts. In fact, the security has racked up 13 "buy" or better endorsements, compared to just one "hold" and not a single "sell." Meanwhile, the consensus 12-month price target of $77.88 represents a steep 58% premium to current levels. Should MPC extend its downward slump amid seasonal headwinds, a flood of downgrades and price-target reductions could exacerbate selling pressure on the shares.
Options buyers also remain enamored of Marathon Petroleum. The equity sports a 10-day call/put volume ratio of 4.43 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), meaning traders have bought to open more than four MPC calls for every put in the past two weeks. This ratio is higher than 68% of all other readings from the past year, pointing to a slightly healthier-than-usual appetite for bullish option bets during the past two weeks. An exodus of option bulls could also weigh on the oil stock.