The POWR Ratings have been calculated, identifying several stocks that have been downgraded to either “Sell” or “Strong Sell” status. In particular, brick-and-mortar retailers have been downgraded quite severely as a second wave of the virus spreads across the land.
If you own any of the stocks listed below or play the market through options puts or shorting stocks, you have the potential to make a tidy sum of money based on their bearish outlooks.
Without further ado, let’s take a look at four of the latest POWR Ratings downgrades: Macy’s (M), NantKwest (NK), Oxford Industries (OXM), and NextCure (NXTC).
It wasn’t long ago when M was a brick-and-mortar retail superstar. Times have changed. M has been supplanted by online businesses, including subscription-style services such as Stitch Fix. The bottom line is department stores such as those owned and operated by M are on their way out.
M has “F” grades in the Buy & Hold and Trade Grade POWR Ratings components. The stock is ranked 44th out of 65 in the Fashion & Luxury industry. Analysts are bearish on M, setting an average price target of $5.50, representing a 14% downside. Though M moved up toward $10 this past spring, it was nothing but a temporary dead cat bounce.
There is no reason to buy M until it demonstrates considerable digital growth, makes progress in cost savings and shows it can continue to move products amidst a pandemic that has no end in sight.
This immunotherapy company makes product candidates to treat cancer, inflammatory diseases, and infectious diseases. NK has “F” grades in the Buy & Hold and Trade Grade components. Furthermore, the stock is ranked in the bottom half of nearly 400 publicly traded companies in the Biotech industry.
Investor excitement over NK’s potential coronavirus vaccine helped send the stock higher earlier this summer, yet it fell right back down under $20 after the jubilation dissipated. The lack of recent positive news from the NK camp is concerning.
Add in the fact that the company has a -21.69% three-month price return, and you have all the more reason to sell your shares or short the stock.
Oxford Industries (OXM)
The clothing industry has taken quite the tumble following the spread of the virus. People are remaining indoors and staring at screens rather than putting in “face time” in public settings. As a result, clothing sales are down. OXM sells clothes under several brand names, including Tommy Bahama.
OXM has “F” grades in the Buy & Hold Grade and Trade Grade components. The stock is ranked 47th out of 65 stocks in the Fashion & Luxury space. OXM has a year-to-date price return of -42%. The stock has a three-year return of -28%.
OXM probably won’t move back toward the $50 level it traded at this past summer until the pandemic nears its end.
NXTC is a biopharmaceutical company that makes immunomedicines for the treatment of cancer and other immune-related diseases. The POWR Ratings show NXTC has “F” grades in the Buy & Hold and Trade Grade components.
The stock is ranked 227th out of nearly 400 in the Biotech space. NXTC has a year-to-date price return of -81%. The stock has a six-month price return of -72%.
The company has delayed its clinical trials as a result of the coronavirus pandemic. Investors would be wise to remain on the sidelines until NXTC executives provide some new product development information.
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M shares rose $0.03 (+0.46%) in after-hours trading Friday. Year-to-date, M has declined -59.75%, versus a 10.35% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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