CPRI also historically underperforms in April
Yesterday, we broke down the best stocks to own in the month of April, historically. Now its time to look at the other end of the spectrum. Schaeffer's Senior Quantitative Analyst Rocky White broke down the worst performing S&P 500 stocks in April, as well as for the second quarter in the past 10 years. Luxury retailer Capri Holdings Ltd (NYSE:CPRI) stands out as the only stock to show up on both lists.
More specifically, looking back over the last decade, Capri stock averaged a second-quarter loss of 9.6% -- the steepest on the list -- with only 25% of returns positive. And when looking at the worst stocks in April, CPRI sports an average monthly loss of 1.8%, with 75% of returns negative.
On the charts, the Michael Kors parent cratered to a record low of $5.42 on March 18. CPRI's year-to-date deficit now sits at roughly 70%, with a mini-breakout in the last week contained by its 20-day moving average.
Short sellers are firmly in control. Short interest increased by 27.1% in the two most recent reporting periods to 14.26 million shares, the most since late 2016. This accounts for a healthy 10.1% of the security's total available float and 5.2 times the average daily trading volume.
In the options pits, calls are extremely popular, despite limited absolute volume. In the last 10 days, 8,557 calls have been bought at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), compared to just 412 puts. This ratio ranks one percentage point from an annual high, indicating that such a skew is rare. However, given the amount of short interest tied up in the stock, it's possible some of this call buying could be shorts seeking an options hedge against any unexpected upside.