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Friday, December 30, 2022 1:16:45 PM
Semiconductor Stock to Avoid in January
By: Schaeffer's Investment Research | December 30, 2022
• Qualcomm stock is one of the worst to own in January
• QCOM steadily worked lower over the course of 2022
As Wall Street looks to enter the New Year, it's a good idea to track stocks that are best left on the sideline to begin the year. Historically, there are a notable amount of names that tend to underperform the broader market in the month of January, and Schaeffer’s Senior Quantitative Analyst Rocky White has pulled the 25 worst to give a head start on how to keep your trading portfolio clean of any misses to start the year.
Coming in as the third-worst performing S&P 500 Index (SPX) stock to own in January is semiconductor concern Qualcomm, Inc. (NASDAQ:QCOM). Per White, over the last 10 years, QCOM averaged a return of -3.3%, and finished higher just three out of 10 times. A move of similar magnitude from Qualcomm stock's current perch of $107.32 would push the shares below their annual-low close of $103.88.
Like most tech and semiconductor stocks, QCOM has had a rough year. A mid-July rally was rejected by the 180-day moving average, while the 100-day trendline recently stepped in as a ceiling. Year-to-date, Qualcomm stock is off by 41%.
An unwinding of optimism from the brokerage bunch could weigh on the shares. Right now, 12 of the 17 analysts covering QCOM rate it a "buy" or better. Plus, the 12-month consensus target price of $146.43 is a 35.8% premium to QCOM's current perch. Both of these point towards room for downgrades and/or price-target cuts.
Weighing in with options could be a prudent route. Qualcomm stock's Schaeffer's Volatility Index (SVI) 39% tanks higher than just 28% of readings from the past year, meaning options traders are pricing in low volatility expectations. It's also worth pointing out that QCOM ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 16 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.
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DiscoverGold
By: Schaeffer's Investment Research | December 30, 2022
• Qualcomm stock is one of the worst to own in January
• QCOM steadily worked lower over the course of 2022
As Wall Street looks to enter the New Year, it's a good idea to track stocks that are best left on the sideline to begin the year. Historically, there are a notable amount of names that tend to underperform the broader market in the month of January, and Schaeffer’s Senior Quantitative Analyst Rocky White has pulled the 25 worst to give a head start on how to keep your trading portfolio clean of any misses to start the year.
Coming in as the third-worst performing S&P 500 Index (SPX) stock to own in January is semiconductor concern Qualcomm, Inc. (NASDAQ:QCOM). Per White, over the last 10 years, QCOM averaged a return of -3.3%, and finished higher just three out of 10 times. A move of similar magnitude from Qualcomm stock's current perch of $107.32 would push the shares below their annual-low close of $103.88.
Like most tech and semiconductor stocks, QCOM has had a rough year. A mid-July rally was rejected by the 180-day moving average, while the 100-day trendline recently stepped in as a ceiling. Year-to-date, Qualcomm stock is off by 41%.
An unwinding of optimism from the brokerage bunch could weigh on the shares. Right now, 12 of the 17 analysts covering QCOM rate it a "buy" or better. Plus, the 12-month consensus target price of $146.43 is a 35.8% premium to QCOM's current perch. Both of these point towards room for downgrades and/or price-target cuts.
Weighing in with options could be a prudent route. Qualcomm stock's Schaeffer's Volatility Index (SVI) 39% tanks higher than just 28% of readings from the past year, meaning options traders are pricing in low volatility expectations. It's also worth pointing out that QCOM ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 16 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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