Plus, a list of 25 stocks that tend to underperform this time of year
Despite recent volatility, the major benchmarks wrapped up July with big monthly wins. Still, as we move into a new month and the latter half of 2021, it could be worth keeping an eye on stocks that have historically underperformed during this time of the year. As it turns out, blue-chip status does not exempt any given stock from being among the worst to own in August, with Walgreens Boots Alliance Inc (NASDAQ:WBA) standing as a case in point. Below, we will further explore the pharmacy stock's recent performance, amid yet another bearish signal.
According to the list above of S&P 500 Index (SPX) stocks with the worst returns in August, provided by Schaeffer's Senior Quantitative Analyst Rocky White, Walgreens Boots Alliance stock averaged a loss of 4.7% over the last 10 years, and finished higher just three times. WBA is also one of only two food and drug retailers to appear on the list, with the other being Cardinal Health (CAH).
At last check, the security is up 1.2% to trade at $47.39, after announcing a partnership with healthcare name Lemonaid Health. Looking back, the shares have been trading mostly sideways since suffering a major pullback in July, with overhead pressure coming from the $48 level, as well as the 30-day moving average. Over the last three months, WBA has shaved 12.4%.
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A penchant for calls has been the norm for Walgreens Boots Alliance stock. Over the past 10 weeks, 141,536 calls have been exchanged, compared to just 49,795 puts. In other words, an unwinding of optimism in the options pits could pressure the equity even lower.
For those wanting to bet on WBA's next move, options could be the best route. The equity's Schaeffer's Volatility Index (SVI) of 26% stands in the 8th percentile of its annual range. This indicates options traders are now pricing in low volatility expectations for the stock.