There could be big winners in the retail sector, if past is prologue
February has been an unusually volatile month for U.S. stocks, with the major market indexes experiencing both their best and worst weeks in over a year. While the stock market has recouped much of the correction from earlier this month, the indexes are still set to snap a jaw-dropping 10-month winning streak. Looking ahead to March, we decided to dig up some historical stock and sector winners that could spice up your portfolio next month, if past is prologue.
SIG Tops 25 Best Stocks to Own in March
According to Schaeffer's Senior Quantitative Analyst Rocky White, below are the 25 best S&P 500 Index (SPX) stocks to own in March, looking back 10 years. Signet Jewelers Ltd. (NYSE:SIG) tops the list, ending the month higher 100% of the time -- one of only four stocks with that win rate. Furthermore, SIG stock sports the best average return by a landslide, gaining 13.34%.
From a longer-term standpoint, however, SIG shares have been in a channel of lower highs and lows since their 2015 peak. The stock was last seen 0.5% lower on the day, trading just south of $52, and earlier this month came within striking distance of May's nearly five-year low of $46.09. Another 13.34% rally from current levels would put SIG around $58.94 -- a region that's rejected rebound attempts since the equity's massive 30% post-earnings bear gap in November.
Should Signet Jewelers stock top that recent speed bump, however, there's plenty of pessimism that could unwind to fuel big gains. Short interest represents 24% of the equity's total available float, or nearly eight sessions' worth of pent-up buying demand, at SIG's average pace of trading.
ULTA Stock Could Rebound Soon
Ulta Beauty Inc (NASDAQ:ULTA) stock has generated the second-best average March gain of 9.8%, looking back 10 years. The makeup supplier has ended the month higher 90% of the time, to boot.
It's been a rough few weeks for ULTA stock, which tumbled earlier this month on reports of a customer lawsuit. The shares are testing their footing atop round-number support in the $200 area, down 3% today. But, another 9.8% surge in March would put ULTA around $219.60 -- back above its 10-day and 20-day moving averages that acted as support in November and December.
Best ETFs and Sectors for March
If SIG or ULTA aren't attractive stocks for your portfolio, perhaps you should continue to look around the retail space. Below are the 25 best exchange-traded funds (ETFs) for the month of March, looking back 10 years. As you can see, the SPDR S&P Retail ETF (XRT) has ended the month higher 70% of the time, with an average gain of 4.41%. In fact, March is the ETF's best month of the year since inception, and there are a handful of retailers getting ready to report earnings this week.
