2 Retailers That Could Pop in September

The stocks tend to outperform in September

The retail sector has been firmly in focus this week, with several stocks seeing huge moves after earnings, including J.Jill (JILL) and Dollar General (DG). Sector peers L Brands Inc (NYSE:LB) and Ross Stores, Inc. (NASDAQ:ROST) could come into focus next month, too, with both showing up on Schaeffer's Senior Quantitative Analyst Rocky White's list of best stocks to own in September. Let's look at what kind of moves both apparel names have made in the last 10 years, and what that could mean for the upcoming month.

Looking at LB, the stock has taken quite a beating in August, as continued struggles in its lingerie unit Victoria's Secret sparked a post-earnings drop last week. The equity is on course for a nearly 36% monthly loss -- its worst in at least 20 years. The stock is slightly higher today, however, up 0.6% to trade at $16.71, bouncing back after tagging a 10-year low of $16 earlier this week.

According to White's data, LB could see an even bigger rebound next month, if history is any indicator. In the last 10 years, LB has finished September higher nine times, with an average return of 7.2% -- the second best return on the list after Ulta Beauty (ULTA). At its current perch, a similar move would put the stock right back beneath $18.

ROST, on the other hand, just hit a brand new all-time high of $108.48 today, before losing steam in the $108 region, which has acted as a ceiling for the retail stock in recent months. The equity has since pulled back, now down 0.8% at $106.26.

The clothing seller could conquer this level of resistance next month, though, if past is precedent. Per White's data, ROST has enjoyed eight September wins during the past 10 years, and has averaged a monthly gain of 3.4%. A move of the same magnitude would put the stock north of this $108 ceiling, and into uncharted territory near $110.