If you were thinking about doing some portfolio paring, now is the time to start compiling a list of stocks to sell.
Those of you who are trading veterans likely already know what the coming month likely holds. September is the only month that, on average, is a decided loser for the market. Going back to 1950, the S&P 500 loses an average of 0.67% for the month, and has logged more losses (38 of them) than gains (29) during that 67 year span.
Perhaps even more alarming right now is that stocks look like they’re trying to start 2017’s September on a bearish foot.
This undertow bodes particularly poorly for the individual stocks that usually don’t do well this coming month anyway, and/or are positioned for a pullback.
Here’s a closer look at the big-name stocks to sell soon, as they’re most likely to end September lower than where they started it. A lot lower.
Stocks to Sell in September: Nordstrom (JWN)
Giving credit where it’s due, uppish-scale retailer Nordstrom, Inc. (NYSE:JWN) posted impressive results last quarter, topping revenue as well as earnings estimates. Same-store sales even grew 1.7%, making Nordstrom a rare bright spot in a sea of retail misery.
It just didn’t matter. JWN shares were falling before earnings, and continued to slide lower after earnings.
Things are apt to get worse for the retailer before they get better too.
See, Nordstrom is one of those stocks that almost always performs poorly in September, even in a “good” year. Although the meltdown doesn’t typically start until the middle of the month, that small lift in the first couple of weeks of September sets up what generally amounts to a 5% pullback by the end of the month, rain or shine.
Stocks to Sell in September: Stanley Black & Decker (SWK)
Shares of toolmaker Stanley Black & Decker, Inc. (NYSE:SWK) are a lot like Nordstrom shares in that they don’t exactly get September started on a wrong foot. It doesn’t take long for SWK to run into a September headwind, though, with the stock’s typical loss of 3% between mid-September and mid-October being a pretty reliable pattern.
And Stanley Black & Decker has more than earned a spot on a list of stocks to sell this year anyway.
You see, while the year-to-date gain of 20.9% is decidedly bullish, it also establishes a ton of profit-taking potential. In fact, traders are already capitalizing on the opportunity.
If the market’s broad undertow gets really ugly, it’ll become even easier to justify an exit of SWK.
Stocks to Sell in September: Apple (AAPL)
It’s undoubtedly going to be the most controversial name on this look at stocks to sell sooner than later, particularly with the launch of a new iPhone just days away. I know it will be at odds with some of my InvestorPlace peers.
But Apple Inc. (NASDAQ:AAPL) has more working for it than against it right now, and September usually isn’t a good month for the stock anyway.
In the bigger picture, the 80% run-up over the course of the past 12 months has left AAPL shares at the upper end of a long-term trading range that doesn’t leave room for more upside. Moreover, while the launch of what could be the most impressive smartphone ever seems like a big deal, history shows that such news hasn’t always resulted in bullishness … particularly when the stock’s overbought the way it is now.
With or without the bigger-picture headwind though, September just isn’t a great month for Apple. On average it loses 6% of its value, and even in a bullish year it just breaks even, on average. Just don’t stay out too long. More often than not, the last three months are quite bullish ones of AAPL.
Stocks to Sell in September: Whirlpool (WHR)
As tempting as it may be to step into a beleaguered Whirlpool Corporation (NYSE:WHR) while the stock’s down 6% year-to-date and is trading at a forward-looking P/E of 9.8, don’t take the bait… at least not yet. See, when things are bad for WHR, they’re really, really bad.
The average September/October performance for Whirlpool stock is a loss on the order of 3.4%, unless the stock is in a distinct downtrend. In that case shares lose on average of 9.5% for the two-month stretch.
Things are fine — even a little bullish — when the undertow is a positive one, but that’s not what we have right now.
The backdrop of a revenue and earnings miss last quarter only fans the bearish flames.
Stocks to Sell in September: AbbVie (ABBV)
Last but not least, add drugmaker AbbVie Inc (NYSE:ABBV) to your list of stocks to sell before we get too far into September.
It’s actually rather interesting… regardless of the kind of performance ABBV shares put up for a full year, the day-to-day performance looks quite similar in good years or bad.
That is, January is usually rough, followed by strength between February and August. Then in September, things either get bad, or get very bad. October usually wipes away the September blues, but there’s that small window over the course of September and early October where the stock just can’t do anything right.
That fact that AbbVie shares are well ahead of their usual year-to-date pace for 2017 only adds to their vulnerability, securing their spot on a list of stocks to sell this coming month.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter.