Target This Retail Stock in September

Plus 24 other stocks that tend to outperform in September

Managing Editor
Sep 1, 2020 at 2:51 PM
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With Wall Street's historic August firmly in the rearview, it's time to look ahead at the best stocks to own in September, historically. In a list compiled by Schaeffer's Senior Quantitative Analyst Rocky White, of the best 25 S&P 500 (SPX) stocks to own in September over the past 10 years, cosmetics retailer Ulta Beauty Inc (NASDAQ:ULTA) stands out as the top performer.

best stocks september

More specifically, looking back over the last decade, Ulta Beauty stock boasts an average September return of 9.4%, with nine out of 10 returns positive. It's also worth noting that seven general retailers occupy the list, the most of any sector. 

At last check, ULTA was trading at $230.63, so a move higher of similar magnitude would put the stock above its year-to-date breakeven point and in territory not charted since early June. The shares used a post-earnings bull gap from Aug. 28 to topple their 200-day moving average, a trendline not conquered since June 4. 

Daily Stock Chart ULTA

The good news for options traders is that a post-earnings volatility crush means near-term ULTA options can be had for a bargain at the moment. The security's Schaeffer's Volatility Index (SVI) stands up at 44% -- in the 15th percentile of its annual range. This indicates that now is an attractive time to jump aboard the blue chip with options.

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