<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Heading into a new month, year, and decade, Schaeffer's Senior Quantitative Analyst Rocky White broke down the best S&P 500 stocks to own in January over the past 10 years. One name in particular stood out: Netflix Inc (NASDAQ:NFLX), which is not only the sole FAANG stock to show up on the list, but it’s also boasted particularly impressive returns in recent years.” data-reactid=”11″>Heading into a new month, year, and decade, Schaeffer’s Senior Quantitative Analyst Rocky White broke down the best S&P 500 stocks to own in January over the past 10 years. One name in particular stood out: Netflix Inc (NASDAQ:NFLX), which is not only the sole FAANG stock to show up on the list, but it’s also boasted particularly impressive returns in recent years.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="More specifically, looking back over the last decade, Netflix stock boasts an average January return of 28.9%, with nine out of 10 returns positive. That’s easily the best on the list, with Skyworks Solutions (SWKS) coming in at a distant second with its 9.6% average return.” data-reactid=”12″>More specifically, looking back over the last decade, Netflix stock boasts an average January return of 28.9%, with nine out of 10 returns positive. That’s easily the best on the list, with Skyworks Solutions (SWKS) coming in at a distant second with its 9.6% average return.
Breaking down NFLX even more, the FAANG stock’s 2018 return in January came in at 40.8%, while 2012 and 2013 resulted in January gains of 73.5% and 78.5%, respectively. In fact, Netflix has made a double-digit percentage move in each January over the past decade, with just one occurrence to the downside — a 19.7% plunge in 2016.
After bottoming at $252.28 on Sept. 24, NFLX — which at last check was trading at $328.33 — ran out of steam at the $340 level last month after a downgrade. While the shares have pulled back some since then, their 200-day moving average has emerged as a floor, a trendline that served as support earlier in 2019.
In the options pits, calls seem to hold the advantage. The 10-day call/put volume ratio of 1.69 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks 2 percentage points from an annual high, suggesting that calls have been bought to open at a much quicker clip relative to puts than what’s normally seen.
Options buying appears to be an attractive play at the moment. The FAANG name’s Schaeffer’s Volatility Index (SVI) of 29% sits in the low 3rd percentile of its annual range. This means short-term NFLX options are pricing in extremely low volatility expectations right now.
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