Plus, a list of 25 stocks that outperform in August
Retailers are about to take over the earnings confessional, with TJX Companies Inc (NYSE:TJX) slated to report second-quarter results before the open on Monday, Aug. 21. The equity is also one of the best 25 S&P 500 Index (SPX) names to own in August, and is the only retailer thar made the cut, according to our Schaeffer's Senior Quantitative Analyst Rocky White.
Digging deeper, TJX finished the month higher in nine of the last 10 years, and averaged a 4.4% gain. The shares sport a more than 31% year-over-year lead, and are fresh off a July 12, all-time high of $115.34, with support from the $111 level sweeping into catch its latest pullback.
It's likely that earnings will turn out well, if past is precedent. TJX finished six of its last eight post-earnings sessions higher, including a 3.5% gain back in May. What's more, the equity averaged a move of 2.8% over the past two years, regardless of direction.
Premiums are affordable amid low volatility expectations, per the stock's Schaeffer's Volatility Index (SVI) of 18% that stands in the relatively low 22nd percentile of annual readings.
A premium-selling strategy could be the right move, given TJX sports a Schaeffer's Volatility Scorecard (SVS) of 19 out of 100. In other words, the stock has consistently realized lower volatility than its options have priced in.