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Worst Stocks for July and Beyond

Andrea Kramer

The stock market has been red-hot in June, with the S&P 500 Index (SPX) fresh off a recent record high. Turning our attention to July, however, several equities could begin to wilt, if history is any guide. Among the worst stocks to own in July is cloud concern Akamai Technologies, Inc. (NASDAQ:AKAM), while packaged food titan Campbell Soup Company (NYSE:CPB) tends to struggle in the third quarter.

Below are the 25 worst SPX stocks to own in July, looking at historical returns over the past decade. To make the list -- cultivated by Schaeffer's Senior Quantitative Analyst Rocky White -- stocks had to have at least eight years' worth of returns. As you can see, Akamai has racked up one of the steepest average losses, at 2.68%, and has ended July higher less than half the time.

worst july stocks

AKAM shares started 2019 red-hot, rallying from a Jan. 3 annual low of $57.18 to a May 1 18-year high of $86.19, supported by its 60-day moving average. Since then, the equity has consolidated its gains beneath the $80-$82 region, which also acted as a roadblock in mid-2018.

AKAM stock chart june 27

Should AKAM once again struggle in July, the equity could be vulnerable to an analyst backlash. Currently, 11 of 17 analysts maintain "buy" or better opinions.

Near-term options traders could also take a hit, should Akamai shares suffer their typical summer doldrums. The security's Schaeffer's put/call open interest ratio (SOIR) of 0.36 is just 1 percentage point from the bottom of its annual range, suggesting short-term traders have rarely had a bigger call bias in the past year. In the July series, peak call open interest sits at the overhead 82.50 strike, which could translate into an added layer of options-related resistance over the next few weeks.

Meanwhile, Campbell Soup popped up on our list of worst stocks to own in the third quarter. The security has ended the three-month stretch higher just 30% of the time over the past 10 years, and has averaged the steepest loss of all eligible stocks, at 3.85%.

worst Q3 stocks

CPB shares are down 2.3% to trade at $39.52 today, as packaged food stocks sink with sector peer Conagra Brands (CAG). The stock could be on its way to filling an early June bull gap -- the result of upbeat guidance -- which sent CPB to 11-month highs, and it's now testing a foothold in the +20% year-to-date range.

CPB stock chart june 27

Traders wanting to speculate on another rough quarter ahead for CPB should consider buying options. The stock's Schaeffer's Volatility Index (SVI) of 24% is in just the sixth percentile of its annual range, suggesting near-term options are pricing in relatively modest volatility expectations right now. And, for traders seeking bullish opportunities in the near term, here are the best stocks to own in July and the third quarter, historically.