Don't Bet on this Drug Stock in September

Plus 24 other stocks that tend to underperform in September

Patrick Martin
Sep 2, 2020 at 2:34 PM
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Yesterday, we broke down the best 25 stocks to own in September, from a historical perspective. Now, we are going to take a look at the other end of the spectrum. Below is a list compiled by Schaeffer's Senior Quantitative Analyst Rocky White of the worst 25 S&P 500 (SPX) stocks to own in September over the past 10 years. Drug stock Mylan NV (NASDAQ:MYL) stands out on the list, for reasons we'll expand on later.

Worst September Stocks

More specifically, looking back over the last decade, Mylan stock boasts an average September loss of 3.8%, with only four out of 10 returns positive.That's good for the second-worst on the list, and one of the few biotechnology stocks to be found. 

At last check, MYL was trading at $15.52. A drop of similar magnitude a month out means the stock could breach the $15 level for the first time since May. For the summer months, Mylan stock has traded sideways, with the 160-day moving average containing any breakouts. Year-to-date, the security is down 22.8%. 

Daily Stock Chart MYL

Puts have been dominant in the options pits. MYL sports a 10-day put/call volume ratio of 3.20 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) which sits 2 percentage points from an annual high. In other words, puts have been preferred over calls during the past two weeks.

Those options traders are in luck, considering MYL premiums can be had for a bargain at the moment. The security's Schaeffer's Volatility Index (SVI) stands up at 45% -- in the 4th 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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