This article was so popular when I originally published it on 6/22/19 that it was due for an encore performance. The idea is to go beyond the Sell label of stocks to actually find those that are likely to drop in price.
Of course you should immediately expunge these weakling stocks if they are showing up on the long side of your portfolio ledger. But for those who appreciate that shorting stocks is often a potent path to investment gains, then this is a ripe list of short opportunities.
We start this process by realizing that there are currently 1338 Sell rated stocks according to the POWR Ratings system.
Unfortunately not all of them will tumble in price. In fact, many of them score well on popular value measures.
This makes sense when you realize that the POWR Ratings is focused on momentum. Thus, the top rated stocks are experiencing the most momentum and typically have higher measures on key value metrics like PE, PEG, P/S, Book Value etc.
Conversely those with the least momentum, and scored lowest on the POWR Ratings, are out of favor stocks. Many of them sinking to fairly low valuation metrics that could attract value investors hoping for a turnaround.
The problem is that most stocks heading lower in price are doing that because of weakness in their fundamental picture. Most likely attributable to a decline in their earnings outlook. My experience tells me to avoid those stocks like the plague as they typically go from bad to worse.
My goal today is not just to show you stocks that have POWR Ratings of D or F (Sell and Strong Sell). But also where the Wall Street analyst community still anticipates that prices will go even lower. Meaning where the average target price for shares is lower than the current price. The difference is what we call “Downside %”.
Let’s dig further into the screening process to find these unsavory stocks.
1338 POWR Rating Sells
1041 of the above had analyst target prices
1023 of them actually had price targets above the current price
18 stocks remained with a lower target price than actual
9 of them had more than 10% downside to their fair value targets. And those are the ones we want to focus on today.
You will certainly recognize some of these names. Especially Deutsche Bank (DB) and PG&E (PCG). On top of that is a grouping of weak retail stocks including Buckle (BKE) and Rite Aid (RAD).
Here is the full list of 9 Sell Rated stocks that also have the most downside potential.
|Company||Ticker||Market Cap ($mil)||Current Price||Target Price||Downside %|
|Horizon Glbl Cp||HZN||$99||$3.92||$2.17||-44.64%|
|Usa Tech Inc||USAT||$447||$7.45||$4.50||-39.60%|
|Line Corp -Adr||LN||$7,044||$29.53||$19.50||-33.97%|
|Deutsche Bk Ag||DB||$15,583||$7.54||$5.60||-25.73%|
|Rite Aid Corp||RAD||$488||$9.06||$8.00||-11.70%|
Are your stocks Sell rated?
As noted above, there are over 1300 stocks today with Sell ratings. The best way to find out is by seeing their current POWR Rating on StockNews.com.
We allow free members of the site to see the ratings for each stock on their respective quote pages. If you are not currently a free member with this access, then sign up now.
Also here are links to 3 other popular destinations to make the best use of the POWR Ratings:
Full List of “A ”Rated Strong Buy Stocks– See all the top rated stocks.
About the POWR Ratings– Learn what’s build inside the POWR Ratings that helps find stocks ready to outperform.
Reitmeister Total Return portfolio. This is where Steve Reitmeister employs his 40 years of investment experience to hand select the best POWR Ratings stocks.
About the Author
Steve Reitmeister is the CEO of the Stock News Network bringing 40 years of experience to help individual investors find outperformance. For the better part of the past two decades he was the Editor-in-Chief of Zacks.com where millions of investors enjoyed his timely market insights. His commentary has also been featured on other leading investment websites including Yahoo Finance, SeekingAlpha, CNNMoney and MarketWatch. Steve has an MBA from DePaul University and B.A. in Economics from the University of Wisconsin (Go Badgers!).
PCG shares were unchanged in after-hours trading Tuesday. Year-to-date, PCG has declined -7.83%, versus a 19.99% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of StockNews.com.
More Resources for the Stocks in this Article
View more information: https://stocknews.com/news/pcg-9-nasty-sell-rated-stocks-set-to-tumble/