U.S. equities are back in negative territory on Monday after suffering four straight days of losses during last week’s holiday-shortened run. Technology stocks are trying to rally, but they are being thwarted by ongoing trade concerns with China as President Trump has threatened a third round of tariffs on nearly $300 billion worth of imports, following a second round of tariffs on roughly $200 billion in imports.
The latest is that Chinese officials are hoping Democrats carry the day in November’s mid-term elections (and thus, thwart Trump’s trade agenda) or that Wall Street officials will ratchet up the pressure. Both are far from assured. Moreover, investors continue to fret about Friday’s hotter-than-expected wage data which increases the chances of a more aggressive rate hike pace from the Federal Reserve.
As a result, the Russell 2000 small cap index is threatening to fall below its 20-day moving average for the first time in weeks after extending to new record highs throughout the end of August. Smaller stocks have been lagging their large-cap peers since the end of June, as investors pile into mega-cap technology names like Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL).
In anticipation of further weakness, here are nine small-cap stocks to sell now:
Small-Cap Stocks to Sell: Newmark Group (NMRK)
Newmark Group (NASDAQ:NMRK) shares are threatening to fall below their mid-August lows to cap a decline of nearly 30% from the highs seen in early February. The company, which IPO’d in December, is a provider of commercial real estate services, including valuation and property management. Real estate investment trusts (REITs) have come under increased pressure in recent days as inflation worries weaken long-term Treasury bonds and push up yields.
NMRK looks to be caught in the crossfire, on fears of reduced real estate activity as the evidence mounts that the business cycle is in its final stages. NMRK’s gains have been slowing for years. And this comes as the company loads up on debt, which is a major warning sign its balance sheet is being geared up at exactly the wrong time.
Small-Cap Stocks to Sell: Extraction Oil & Gas (XOG)
Shares of independent oil and gas producer Extraction Oil & Gas (NASDAQ:XOG) are down nearly 40% from the highs seen in May/June and are threatening to fall below their early April lows.
The company will next report results on Nov. 6 after the close. Analysts are looking for earnings of 21-cents-per-share on revenues of $319.5 million. When it last reported on Aug. 7, earnings of 3-cents-per-share missed estimates by 4 cents on a 117% rise in revenues.
Small-Cap Stocks to Sell: Flagstar Bancorp (FBC)
Shares of community bank Flagstar Bancorp (NYSE:FBC), based in Michigan, have broken down below their April lows to return to levels not seen since the middle of 2017. This marks a decline of nearly 20% from their January high. Financial stocks in general have been laggards since January on loan demand worries, remaining within the confines of a year-to-date consolidation range as the rest of the market — bolstered by big-cap technology stocks — pushes to new highs.
The company will next report results on Oct. 23, before the bell. Analysts are looking for earnings of 86-cents-per-share on revenues of $245 million. When the company last reported on July 24, earnings of 85 cents-per-share beat estimates by a penny on a slight increase in net interest margin.
Small-Cap Stocks to Sell: Amkor Technology (AMKR)
Amkor Technology (NASDAQ:AMKR) shares are breaking down below their May low as the entire semiconductor sector comes under pressure amid signs of weakening demand and inventory oversupply. The company is a provider of semiconductor packaging and test services, thus sitting at the center of the chipmaking supply chain.
The company will next report results on Oct. 29, after the close. Analysts are looking for earnings of 18-cents-per-share on revenues of $1.1 billion. When the company last reported on July 30, earnings of 14-cents-per-share beat estimates by 9 cents on a 5.8% rise in revenues.
Small-Cap Stocks to Sell: Select Income REIT (SIR)
Select Income REIT (NASDAQ:SIR) shares are breaking down below their July/August lows, falling below the neckline of a five-month head-and-shoulders reversal pattern that traces to a price target of $17.50, which would be a loss of roughly 13% from here. As mentioned above, REITs have been hit back in the backup in long-term rates.
The company will next report results on Oct. 30, before the bell. Analysts are looking for earnings of 58-cents-per-share on revenues of $116.3 million. When the company last reported on July 31, earnings of 45-cents-per-share misses estimates by 17 cents on a 0.1% rise in revenues.
Small-Cap Stocks to Sell: Iamgold (IAG)
Gold miner Iamgold (NYSE:IAG) is suffering big time, currently down more than 40% from its late May high, as gold prices struggle to stay above the $1,200-an-ounce level despite evidence of bubbling inflationary pressures. The strong dollar has a lot to do with this, as alternatives to fiat currency just aren’t top of mind right now. This is down from a high of $1,370 back in April.
The company will next report results on Nov. 7, after the close. Analysts are looking for earnings of 1-cent-per-share on revenues of $2.78 million. When the company last reported on Aug. 8, earnings of 3-cents-per-share beat estimates by 2 cents on a 1.1% rise in revenues.
Small-Cap Stocks to Sell: Alamos Gold (AGI)
Alamos Gold (NYSE:AGI), like IAG above, is getting pummeled on a lack of a bid for precious metals in general and gold in particular. This comes despite the reporting of a “significant” increase in mineral reserves at its Island Gold property in Ontario, Canada. This brings shares down to levels not seen since early 2016.
The company will next report results on Oct. 31, after the close. Analysts are looking for earnings of 3-cents-per-share on revenues of $161.7 million. When the company last reported on Aug. 1, earnings of 1-cent-per-share missed estimates by 2 cents on a 29% rise in revenues.
Small-Cap Stocks to Sell: Intrexon (XON)
Intrexon (NYSE:XON) is threatening below its summertime trading range to return to levels not seen since back in February. Shares remain below their 20-day, 50-day and 200-day moving averages. This marks a continuation of a long fall from grace going back to the summer of 2015, when shares peaked at a high of nearly $70.
The company will next report results on Nov. 8, before the bell. Analysts are looking for a loss of 25-cents-per-share on revenues of $48.2 million. When the company last reported on Aug. 9, a loss of 51-cents-per-share missed estimates by 28 cents on weaker-than-expected revenues of $45.3 million.
Small-Cap Stocks to Sell: Mueller Industries (MLI)
Mueller Industries (NYSE:MLI) is a maker of copper, brass, aluminum and plastic products used in plumbing and HVAC systems. This is as nuts and bolts as you can get, with direct exposure to capital expenditures and real estate investment spending. Shares peaked back in January and have been struggling to recoup their losses in recent months. They’re rolling over hard now, crashing below their 50-day and 200-day moving averages as the six-month uptrend ends. Watch for a return to the April lows, which would be worth a decline of more than 15% from current levels.
When the company last reported on July 24, earnings of 58-cents-per-share beat a single-analyst estimate of 54 cents on a 7.9% rise in revenues.
Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.
