Schaeffer's Quantitative Analyst Chris Prybal ran a study to determine which stocks tend to perform poorly during the month of August, limiting the search to those equities with at least five returns on the books. Among the names that average a loss of 4% or more during the month ahead are mobile gaming stock Glu Mobile Inc. (NASDAQ:GLUU), integrated circuit specialist Himax Technologies, Inc. (ADR) (NASDAQ:HIMX), and wireless firm T-Mobile US Inc (NYSE:TMUS).
With seven August returns on record, GLUU has ended the month higher only 29% of the time, with the shares racking up an average deficit of 10.5% for the period. So far this month, GLUU has lost roughly 7% to trade at $5.21, with the stock experiencing some bearish momentum in the wake of its poorly received second-quarter earnings report on July 30. However, GLUU still sports a year-to-date gain of about 34%, and is now testing support at its 50-day moving average, located at $5.05.
Meanwhile, short sellers are banking on Glu Mobile Inc. (NASDAQ:GLUU) to continue its trend of poor August performances. Short interest accounts for 15.8% of the stock's float, even after a 7.6% decline during the most recent reporting period. On the other end of the sentiment spectrum, 89% of analysts have deemed GLUU worthy of a "strong buy" rating.
HIMX has notched an average loss of 7.1% in August, ending the month in positive territory just two times out of eight. A bearish finish this month would extend the stock's precipitous decline from its March 2014 record high of $16.15; currently, HIMX is down 54.7% year-to-date to trade at $6.67.
Given the equity's technical troubles, it's no surprise that put buyers have flocked to Himax Technologies, Inc. (ADR) (NASDAQ:HIMX). During the past 10 days, speculative players have bought to open 1.32 puts for every call on HIMX, which ranks higher than 94% of other such readings taken over the last 52 weeks. In other words, options traders have preferred puts over calls by a wider margin only 6% of the time.
As for TMUS, the stock has managed only 29% positive August finishes over the last seven summers, with an average monthly drop of 11.5%. Following today's news that Sprint Corporation (NYSE:S) has abandoned its buyout bid for TMUS, shares of the latter have tumbled more than 8% to trade at $31.16. As a result, the stock is now back in negative territory for 2014.
Sprint's decision clears the way for France's Iliad SA to move forward with its own offer to acquire 56.6% of T-Mobile US Inc (NYSE:TMUS). That deal values TMUS at only $33 per share, compared to analysts' average 12-month price target of $36.67. Meanwhile, 59% of brokerage firms have deemed the wireless issue a "buy" or better. During the short term, TMUS could be vulnerable to price-target cuts or downgrades as the M&A news continues to unfold.
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