Now is the time to call it quits on General Electric stock
Last week brought us a disappointing end to the second quarter of 2022, with the S&P 500 (SPX) seeing its worst first half of the year since 1970. With so many traders getting burned, and a new quarter kicking off, now seems like an ideal time to weigh investment strategies, and ditch stocks that tend to underperform over the next three months. One name in particular investors may want avoid altogether is General Electric Company (NYSE:GE), which topped Senior Quantitative Analyst Rocky White's list of worst SPX stocks for the third quarter.
According to White, General Electric stock averaged a third-quarter loss of 5.7% in the past 10 years, finishing the month positive only twice. Last seen down 0.5% to trade at $61.81, a move of similar magnitude would pressure the security back below $59, or its lowest trading level in nearly two years.
Digging deeper, the 20-day moving average moved in as pressure in mid-June, with the shares just yesterday hitting an annual low of $59.93. The equity is today looking to log a seventh consecutive day in the red, while carrying a hefty 34.6% year-to-date deficit.
An unwinding of optimism among options traders could provide additional headwinds. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), GE's 10-day call/put volume ratio of 3.34 sits in the elevated 90th percentile of its annual range. This points to a strong appetite for calls lately.
General Electric stock also looks ripe for a round of downgrades and/or price-target cuts. Of the 14 analysts in coverage, eight call the security a "buy" or better, while the 12-month consensus price target of $97.17 is a lofty 57.2% premium to current levels.