In this article, we discuss the 5 small-cap stocks to sell now before recession begins. If you want to read about some more small-cap stocks to sell now before recession begins, go directly to 10 Small-Cap Stocks to Sell Now Before Recession Begins.
5. Silk Road Medical, Inc (NASDAQ:SILK)
Number of Hedge Fund Holders: 15
Market Cap as of May 27: $2 billion
Percentage Decline in Share Price Year-to-Date: 26.58%
Silk Road Medical, Inc (NASDAQ:SILK) operates as a medical device company. On May 4, the company posted earnings for the first quarter of 2022, missing market estimates on earnings per share by $0.13 and reporting a revenue of around $28 million, up more than 27% compared to the revenue over the same period last year.
On May 17, Citi analyst Joanne Wuensch maintained a Neutral rating on Silk Road Medical, Inc (NASDAQ:SILK) stock and lowered the price target to $33 from $44, noting that market multiples were contracting due to higher inflation, slowing growth, and rising interest rates.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Deerfield Management is a leading shareholder in Silk Road Medical, Inc (NASDAQ:SILK), with 2.1 million shares worth more than $88 million.
At the end of the first quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $133 million in Silk Road Medical, Inc (NASDAQ:SILK), compared to 12 in the preceding quarter worth $94 million.
4. Skillz Inc. (NYSE:SKLZ)
Number of Hedge Fund Holders: 18
Market Cap as of May 27: $655 million
Percentage Decline in Share Price Year-to-Date: 74.67%
Skillz Inc. (NYSE:SKLZ) owns and runs a mobile gaming platform. On May 4, the firm posted earnings for the first quarter of 2022, missing market estimates on earnings per share by $0.19 and reporting a revenue of $93 million, up 11% compared to the revenue over the same period last year. The company said it expected to end 2022 with an earnings margin above 30% and a revenue of around $400 million, representing 24% year-on-year growth. The firm was founded in 2012 and is based in California.
On May 23, Citi analyst Jason Bazinet downgraded Skillz Inc. (NYSE:SKLZ) stock to Neutral from Buy and lowered the price target to $2.10 from $5, noting that there were concerns around the “efficiency of sales and marketing spend” for the firm.
At the end of the first quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $154 million in Skillz Inc. (NYSE: SKLZ), the same as in the previous quarter worth $370 million.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Wildcat Capital Management is a leading shareholder in Skillz Inc. (NYSE:SKLZ), with 21 million shares worth more than $64 million.
In its Q3 2021 investor letter, Bireme Capital, an asset management firm, highlighted a few stocks and Skillz Inc. (NYSE:SKLZ) was one of them. Here is what the fund said:
“Another short position we initiated was in Skillz Inc. (NYSE:SKLZ), a mobile game publisher with $230m in 2020 revenue, and $98m of 2020 EBITDA losses. When we shorted it, SKLZ had a ~$6b valuation; it is now down to $4.5b, and we believe it has much more room to fall.
Skillz Inc. (NYSE:SKLZ) is a great example of investors getting hyped up over a quickly-growing company employing misleading industry jargon. In this case, the jargon is “eSports.” eSports is, in fact, a large and growing industry, and the term describes the business of competitive video games. Typically, this involves hosting tournaments, either live or online, where spectators can watch professional gamers compete at high levels. Prize pools are often in the millions. Ticket sales, sponsorships, and advertising revenue from such events totaled over $1b in 2020…” (Click here to see the full text)
3. Victory Capital Holdings, Inc. (NASDAQ:VCTR)
Number of Hedge Fund Holders: 18
Market Cap as of May 27: $1.7 billion
Percentage Decline in Share Price Year-to-Date: 22.05%
Victory Capital Holdings, Inc. (NASDAQ:VCTR) operates as an asset management firm. On May 11, the company reported that assets under management at the end of April were around $166 billion, a fall of 6.8% from the previous month when they had been around $178 billion. However, the firm reported a month-on-month increase in alternative asset class which stood at $4.58 billion, up 14% from $4.03 billion at the end of March. The Solutions AUM fell by 7.6% during the month to $54 billion.
On May 23, B Riley analyst Matt Howlett reiterated a Buy rating on Victory Capital Holdings, Inc. (NASDAQ:VCTR) stock with a price target of $36, noting that the firm had delivered significant growth since inception.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Impax Asset Management is a leading shareholder in Victory Capital Holdings, Inc. (NASDAQ:VCTR), with 972,198 shares worth more than $28 million.
At the end of the first quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $113 million in Victory Capital Holdings, Inc. (NASDAQ:VCTR), compared to 18 in the preceding quarter worth $129 million.
In its Q4 2021 investor letter, Gator Capital Management, an asset management firm, highlighted a few stocks and Victory Capital Holdings, Inc. (NASDAQ:VCTR) was one of them. Here is what the fund said:
“Although higher interest rates will benefit the Fund’s portfolio, we are making sure that the Fund is not simply a bet on higher rates. We have several large holdings with inexpensive valuations and catalysts unrelated to higher interest rates. Victory Capital Holdings, Inc. (NASDAQ:VCTR) is an asset manager making attractive acquisitions of smaller asset managers, trading at 6x earnings, and returning capital to shareholders through increased dividends and share repurchases.”
2. Wheels Up Experience Inc. (NYSE:UP)
Number of Hedge Fund Holders: 24
Market Cap as of May 27: $556 million
Percentage Decline in Share Price Year-to-Date: 45.10%
Wheels Up Experience Inc. (NYSE:UP) provides private aviation services. The company posted earnings for the first quarter of 2022 on May 12, beating market expectations on earnings per share by $0.06. The revenue over the period was $325 million, up over 24% compared to the revenue over the same period last year and beating estimates by $24 million. The company owns and runs a fleet of around 1,500 aircrafts. It was founded in 2013 and is headquartered in New York.
On May 13, BTIG analyst Marvin Fong maintained a Buy rating on Wheels Up Experience Inc. (NYSE:UP) stock and lowered the price target to $5.5 from $7, noting that margins have been a key issue for the firm but there had been some progress on that front.
At the end of the first quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $27 million in Wheels Up Experience Inc. (NYSE:UP), compared to 16 in the preceding quarter worth $33 million.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Millennium Management is a leading shareholder in Wheels Up Experience Inc. (NYSE:UP), with 1.5 million shares worth more than $4.8 million.
1. Brinker International, Inc. (NYSE:EAT)
Number of Hedge Fund Holders: 27
Market Cap as of May 27: $1.12 billion
Percentage Decline in Share Price Year-to-Date: 18.98%
Brinker International, Inc. (NYSE:EAT) owns and runs casual dining restaurants. The stock has nosedived in recent weeks as the disappointing earnings of the firm showed the impact of inflation and labor costs on the business. The company missed market expectations on earnings per share for the first quarter of 2022 by $0.11. The diluted EPS forecasts of the firm for 2022 also fell short of analysts’ predictions, with the firm forecasting $3.05 to $3.30 against consensus estimates of $3.48.
On May 9, Stifel analyst Chris O’Cull maintained a Hold rating on Brinker International, Inc. (NYSE:EAT) stock and lowered the price target to $40 from $42, noting that “inflationary pressures continue to impact margin performance” of the firm.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tremblant Capital is a leading shareholder in Brinker International, Inc. (NYSE:EAT), with 1.2 million shares worth more than $46 million.
At the end of the first quarter of 2022, 27 hedge funds in the database of Insider Monkey held stakes worth $170 million in Brinker International, Inc. (NYSE:EAT), compared to 35 in the previous quarter worth $185 million.
You can also take a peek at 13 Best Hemp Stocks to Buy Now and Billionaire Dan Loeb’s Top 10 Stock Picks.
