In this article, we discuss the 10 stocks that just received a Sell rating from analysts. If you want to skip our detailed analysis of these stocks, go directly to the 5 Stocks That Just Received Sell Rating from Analysts.
The spread of the Delta variant of the coronavirus and the social media amplification of conspiracy theories surrounding COVID-19 vaccines have increased Wall Street fears around a lull in the post-pandemic economic recovery that was just beginning to gather some steam. Data from the Bureau of Labor Statistics, released last month, indicated that the United States economy remained more than 5 million jobs short of the position it was in just before the virus crisis in February 2020. This recovery will not be fully complete until 2023.
The poverty rate in the country is also rising. Nearly 3.3 million Americans slipped below the poverty line in 2020, according to the Census Bureau. The median household income also fell close to 3% in 2020, one of the sharpest decreases in almost a decade. A study by the University of Michigan has revealed that consumer sentiment, which stood at 100 before the pandemic, has now dropped to as low as 71. The sentiment is a measure of the confidence that consumers have in their finances and the overall economy. Investors have been positioning their portfolios in light of the new developments and selling stocks that are not likely to perform in the near-term.
Some of the most high-profile stocks that recently received a Sell rating from an investment bank include Twitter, Inc. (NYSE:TWTR), Airbnb, Inc. (NASDAQ:ABNB), and 3M Company (NYSE:MMM), among others discussed in detail below. The uncertainty surrounding the economy and the supply chain problems that have affected several large businesses continue to shape much of the debate around stocks on Wall Street. The tech-enable disruption that dominated 2020 is also in the crosshairs amid inflation fears.
Our Methodology
With this context in mind, here is our list of the 10 stocks that just received a Sell rating from analysts. All the firms listed below have been rated as Sell by an investment advisory in the past few weeks.
The hedge sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The list is compiled according to the number of hedge funds having stakes in each firm.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Stocks That Just Received Sell Rating from Analysts
10. Top Glove Corporation Bhd. (OTC:TGLVY)
Number of Hedge Fund Holders: N/A
Top Glove Corporation Bhd. (OTC:TGLVY) is placed tenth on our list of 10 stocks that just received a Sell rating from analysts. The firm operates as an investment holding company and is headquartered in Malaysia.
On September 20, investment advisory Citi downgraded Top Glove Corporation Bhd. (OTC:TGLVY) stock to Sell from Neutral and lowered the price target to MYR2.65 from MYR7, calling the fourth quarter print for the firm “disappointing”.
9. NFI Group Inc. (OTC:NFYEF)
Number of Hedge Fund Holders: N/A
NFI Group Inc. (OTC:NFYEF) is ranked ninth on our list of 10 stocks that just received a Sell rating from analysts. The firm manufactures and markets buses across the world and is headquartered in Canada.
On September 20, investment advisory Stifel downgraded NFI Group Inc. (OTC:NFYEF) stock to Sell from Hold and lowered the price target to C$22 from C$27.50, highlighting the supply chain issues for the firm and their ramifications as one the reasons behind the downgrade.
In addition to Twitter, Inc. (NYSE:TWTR), Airbnb, Inc. (NASDAQ:ABNB), and 3M Company (NYSE:MMM), NFI Group Inc. (OTC:NFYEF) is one of the stocks with negative analyst sentiment.
8. Himax Technologies, Inc. (NASDAQ:HIMX)
Number of Hedge Fund Holders: 16
Himax Technologies, Inc. (NASDAQ:HIMX) is a Taiwan-based company that provides display image processing technologies to firms around the world. It is placed eighth on our list of 10 stocks that just received a Sell rating from analysts.
On September 17, investment advisory Vertical Group downgraded Himax Technologies, Inc. (NASDAQ:HIMX) stock to Sell from Neutral with a price target of $7.5. Jon Lopez, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, California-based investment firm Yiheng Capital is a leading shareholder in Himax Technologies, Inc. (NASDAQ:HIMX) with 8.9 million shares worth more than $149 million.
Along with Twitter, Inc. (NYSE:TWTR), Airbnb, Inc. (NASDAQ:ABNB), and 3M Company (NYSE:MMM), Himax Technologies, Inc. (NASDAQ:HIMX) is one of the stocks that does not have consensus positive analyst ratings.
7. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 21
AMC Entertainment Holdings, Inc. (NYSE:AMC) is a Kansas-based company in the theatrical exhibitions business. It is ranked seventh on our list of 10 stocks that just received a Sell rating from analysts.
On August 24, investment advisory MKM Partners maintained a Sell rating on AMC Entertainment Holdings, Inc. (NYSE:AMC) stock with a price target of $1, underlining that a slowed box office recovery would likely make breakeven cash flow for the firm unlikely this year.
At the end of the second quarter of 2021, 21 hedge funds in the database of Insider Monkey held stakes worth $404 million in AMC Entertainment Holdings, Inc. (NYSE:AMC), up from 19 in the preceding quarter worth $34 million.
Twitter, Inc. (NYSE:TWTR), Airbnb, Inc. (NASDAQ:ABNB), and 3M Company (NYSE:MMM) are some of the stocks that some analysts recommend selling, along with AMC Entertainment Holdings, Inc. (NYSE:AMC).
In its Q4 2020 investor letter, Mittleman Investment Management LLC, an asset management firm, highlighted a few stocks and AMC Entertainment Holdings, Inc. (NYSE:AMC) was one of them. Here is what the fund said:
“AMC Entertainment (AMC) was our only material loser in Q4, dropping from $4.71 to $2.12 (-55%). I planned on discussing here why it was worth at least the $10 per share that my recently reduced estimate of fair value claimed, but since then AMC raised more cash against their UK holdings and then the stock took off due to speculative players from reddit.com getting involved, so we sold it all around $14 during the last week of Jan. 2021. This was a modest profit for most clients, but a loss for some others, depending on when the account began, so check your statements to see where you came out. And yes, I recognize it as being a dose of good luck, which I heartily accept from the universe as it seemed somewhat lacking in the portfolio of late. After the sale of AMC in late January 2021, our exposure to the movie theater business is now exclusively in Canada via Cineplex, which has a 75% market share and much less leverage on its balance sheet.”
6. Novartis AG (NYSE:NVS)
Number of Hedge Fund Holders: 22
Novartis AG (NYSE:NVS) is placed sixth on our list of 10 stocks that just received a Sell rating from analysts. The company makes and sells healthcare products globally and is headquartered in Switzerland.
On September 20, investment advisory Deutsche Bank downgraded Novartis AG (NYSE:NVS) stock to Sell from Hold and lowered the price target to CHF70 from CHF80, noting that the pipeline slate for the company was “thinning”.
At the end of the second quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $1.78 billion in Novartis AG (NYSE:NVS), up from 19 the preceding quarter worth $1.70 billion.
Twitter, Inc. (NYSE:TWTR), Airbnb, Inc. (NASDAQ:ABNB), and 3M Company (NYSE:MMM) are some of the stocks with negative analyst ratings, just like Novartis AG (NYSE:NVS).
In its Q4 2020 investor letter, Oakmark Funds, an asset management firm, highlighted a few stocks and Novartis AG (NYSE:NVS) was one of them. Here is what the fund said:
“Novartis is one of Europe’s largest pharmaceutical companies and possesses a highly diversified portfolio of innovative products. Its share price underperformed both the broader market and its pharma peers during 2020, largely due to a few disappointing late-stage trials and the company’s lack of Covid-19-related therapeutics or vaccines. These short-term issues provided us with an attractive entry point to invest in a leading pharmaceutical franchise with compelling economics. We estimate that the market is currently ascribing almost no value to Novartis’ pipeline despite the company’s excellent track record in new drug development. We expect that Novartis will deliver mid-single-digit, top-line growth and expand margins over the next five years as a result of its cost-savings plan. The company possesses one of the most diversified product portfolios in the pharma industry with 15 $1b+ compounds, which reduces its reliance on any single compound.”
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Disclosure. None. 10 Stocks That Just Received Sell Rating from Analysts is originally published on Insider Monkey.
