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The BEST and The WORST Stocks to Buy in June '22
DATA COMPILED BY SCHAEFFER'S SENIOR QUANTITATIVE ANALYST, ROCKY WHITE. With over 15 years of experience in the financial services industry, White runs the quantitative analysis team at Schaeffer’s. Rocky holds a master’s degree in financial engineering and his research is widely quoted on major media outlets like Bloomberg TV, CNBC, and Fox Business News.
The BEST Stocks to Buy in June 2022
Taking a Closer Look at CARR
Carrier Global Corp (NYSE:CARR) has been middling above the $37 level for the past month -- struggling to rally from its April 28 annual low of $36.23. Today, however, the stock is up 2.7% to trade at $39.34, and back above its 20-day moving average. Plus, this upcoming month has been a strong one for CARR, historically. With the help of Schaeffer's Senior Quantitative Analyst Rocky White, we've compiled a list of the 25 best S&P 500 stocks to own in June, going back 10 years. Carrier Global stock is third on the list, averaging a June return of 7.2%, with 100% of the returns positive. From its current perch, this would put CARR just below the $43 level. There is plenty of room for upgrades, too, which could send the stock higher. Of the 16 analysts in coverage, 10 carry a "hold" rating on CARR. An unwinding of pessimism among short-term options traders could put additional wind at CARR's back, as these players are more put-biased than usual right now. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.89, which sits higher than 77% of readings from the past 12 months.
Edwards Lifesciences Corp (NYSE:EW) has taken a tumble in the second quarter, shedding nearly 25% since its mid-April peak near the $131 mark. The stock looks to have found a bottom near the $91 level, which also captured a pullback in May of 2021, and recently broke back above its 10-day moving average after several weeks below here. With the security last seen up 1.7% at $98.50 and headed for its highest close in almost three weeks, plus a promising seasonal signal flashing for the medical equipment concern, it could be time to look into a rebound for EW in the coming month. A study put out by Schaeffer's Senior Quantitative Analyst Rocky White detailing the 25 best performing stocks in the month of June shows EW high on the list. During the past 10 years, Edward Life Sciences stock has enjoyed a positive one-month return nine times, averaging a 5.5% bounce during this time period. A similar move from EW's current perch would put it just below the $104 level.
Taking a Closer Look at EW (Part 1)
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A unwinding of pessimism among options traders could create additional tailwinds. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 3.81 puts have been picked up for every call in the past two weeks. This ratio its higher than 90% of readings from the past year, suggesting this penchant for bearish bets is unusual. Finally, EW sports a Schaeffer's Volatility Scorecard (SVS) of 85 out of a possible 100. This implies Edwards Lifesciences stock has tended to outperform options traders' volatility expectations of late -- a good thing for call buyers.
Taking a Closer Look at EW (Part 2)
The WORST Stocks to Buy in June 2022
Shares of Wynn Resorts, Limited (NASDAQ:WYNN) are trading 7.6% higher today, last seen at $64.24. While WYNN continues to distance itself from a May 12, roughly 26-month low of $56.36, the descending 20-day moving average has once again stepped in to cap any breakout attempts. What's more, the equity sports a year-over-year and year-to-date deficit of 51.5% and 24.4%, respectively, and history shows June may see these losses grow even more. In fact, according to data from Schaeffer's Senior Quantitative Analyst Rocky White, Wynn Resorts has been one of the worst stocks to own in June on the S&P 500 Index (SPX), looking back over the past 10 years. The shares have averaged a June loss of 2.9%, and finished the month higher just three times over the last decade. Despite this lack of technical backdrop in place, there's plenty of optimism to be unwound on the casino stock. Of the nine analysts covering the shares, four maintain a "buy" or "strong buy" rating. What's more, the equity is ripe for some price target adjustments, as the 12-month consensus price target of $91.50 is a 42.5% premium to current levels. Options traders, meanwhile, have favored calls in the last two weeks, and should this bullish sentiment begin to unwind, it could pressure the security even lower. In fact, at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), WYNN's 10-day call/put volume ratio of 2.81 sits higher than 80% readings from the past 12 months. It's also worth noting that short interest rose 28.4% in the most recent reporting period. Now, the 6.99 million shares sold short make up 6.6% of Wynn Resort stock's available float, or just over two days' worth of pent-up buying power.
Taking a Closer Look at $WYNN
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Taking a Closer Look at CZR (Part 1)
Surging inflation and the prospect of higher interest rates has left Wall Street on edge over the past couple of months, leading to multiple broader-market selloffs that have surely had an impact on investors’ portfolios. As we approach the halfway mark of 2022, investors may be reassessing their investment strategies for the remainder of the year. One stock in particular they may want to avoid going forward is Caesars Entertainment Inc (NASDAQ:CZR), since the casino name just made onto a list of 25 stocks that have historically underperformed in June. More specifically, Caesars Entertainment stock is among the top five names on Schaeffer's Senior Quantitative Analyst Rocky White's list of worst S&P 500 Index (SPX) equities to own in June over the last decade. The security averaged a 2.3% drop for the month, settling lower in roughly seven out of those 10 years. The casino stock has had a dismal 2022 thus far, down 45.5% year-to-date. The shares are also now sitting well below their 80-day moving average, which has been pressuring the security lower since November. Though CZR is now bouncing off an annual low of $42.59, it’s struggling to break past the $52 level.
Analysts are firmly bullish towards Caesars Entertainment stock, with all 10 in coverage calling it a “buy” or better, which leaves plenty of room for pessimism going forward. An unwinding of optimism in the options pits could also pressure the security lower. This is per CZR’s 50-day call/put volume ratio of 3.08 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all annual readings. In other words, there has been a healthier-than-usual appetite for long calls of late.
Taking a Closer Look at CZR (Part 2)
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