Beware These Small-Cap Stocks in October

RMBS and RTEC are two semiconductor stocks at risk, if past is prologue

Sep 29, 2017 at 2:38 PM
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In a month that's typically cruel to stocks, small-caps have been on fire, with the Russell 2000 Index (RUT) hitting a record high again today. And while we recently looked at the best small-cap stocks to buy in the month of October and in the fourth quarter, today we decided to take a look at some that bulls may want to avoid in the short term. Below is a list of the 25 worst small-cap stocks for the next month, if past is prologue, including two semiconductor names: Rambus Inc. (NASDAQ:RMBS) and Rudolph Technologies Inc (NYSE:RTEC).

To populate our list, Schaeffer's Senior Quantitative Analyst Rocky White used the following criteria: RUT stocks as of October 2016; optionable stocks; and stocks with at least eight years of data. The data goes back 10 years.

worst RUT stocks october


Since falling to an annual low of $11.30 on July 6, RMBS stock has managed to win back nearly 18% in the past three months. However, the shares have struggled to overtake the $13.40-$13.60 area -- where Rambus stock was trading before a late-January bear gap.

RMBS has ended the month of October in the black just 20% of the time over the past decade, averaging a loss of 5.51%. From the equity's current perch of $13.43, another 5.51% drop would place Rambus shares around $12.69 -- below support from its 40-day moving average.

RMBS stock chart



Rudolph Technologies stock has rallied nearly 18% in September, last seen trading at $26.10 -- on pace for its highest close since its mid-June 13-year highs. However, if past is prologue, RTEC shares could be due for a breather in October. The equity has ended the month higher just 30% of the time over the past 10 years, averaging a loss of 9.56%. A similar pullback over the next few weeks would have RTEC stock at $23.60

RTEC stock chart

 

 

 

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