Halozyme Therapeutics, Inc. (HALO), Honeywell International Inc. (HON), and Red Hat Inc (RHT) are historically top performers in December
With December kicking off today, we wanted to repeat our normal exercise of looking at
stocks that have historically outperformed during a given month. This is really saying something, considering December is traditionally
one of the best-performing months on the calendar.
Schaeffer's Senior Quantitative Analyst Rocky White crunched the numbers, and the fruits of his labor are summarized in the chart immediately below. Beneath it, I delve a little bit deeper into three of those outperformers: drugmaker
Halozyme Therapeutics, Inc. (NASDAQ:HALO), tech titan
Honeywell International Inc. (NYSE:HON), and software issue
Red Hat Inc (NYSE:RHT).
Halozyme Therapeutics, Inc. (NASDAQ:HALO)
HALO has traditionally put on a clinic in December. In nine of the past 10 years, the stock has posted a monthly gain, with an average return of
25.5%. Of course, as you can see below, the key to that incredible number was a 178.6% jump in December 2006. HALO is certainly no stranger to outsized gains. In 2015 alone, the shares have tacked on 80% to trade at $17.41.
Another breakout December could put HALO bears on notice. For example, nearly 17% of the stock's float is
sold short, representing almost two weeks' worth of pent-up buying power, at average volumes. What's more, the equity's
Schaeffer's put/call open interest ratio (SOIR) of 0.50 ranks higher than 83% of all readings from the prior year. A capitulation among these doubters could add fuel to HALO's fire.
Honeywell International Inc. (NYSE:HON)
HON has finished higher in every single December, going back a decade, and the stock has typically advanced about 5%. Should history repeat itself, the shares -- currently perched at $104.07 -- will topple their record high of $107.41 from early August, and build on an already-impressive 10% quarter-to-date return.
What's more, a
capitulation among option bears could result in additional tailwinds. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HON's 10-day put/call volume ratio of 1.87 sits just 13 percentage points from a 52-week peak. Echoing this, the stock's SOIR of 1.35 outstrips 98% of comparable readings from the last year.
Red Hat Inc (NYSE:RHT)
Finally, RHT has powered higher in nine of the past 10 Decembers, with an average return of 13.6%. Last year, the stock's single-month gain came in at a gaudy 11.3%. That end-of-year momentum fed into 2015, during which RHT has tacked on nearly 19% to trade around $82.18 -- just a chip-shot from an early November 15-year peak of $83.
If past is precedent, option bears could soon be sent packing. During the past 10 weeks at the ISE, CBOE, and PHLX, the stock has amassed a put/call volume ratio of 0.66 -- in the 79th percentile of its annual range. Likewise, RHT's SOIR of 0.76 is located above 88% of comparable readings taken in the past year -- an ideal set-up, from a contrarian perspective.
