In this article, we discuss 5 stocks to sell now according to analysts. If you want to see our stock market discussion and more stocks to discard, click Stock Market Recession 2022: 10 Stocks to Sell Now According to Analysts.
5. iRobot Corporation (NASDAQ:IRBT)
Number of Hedge Fund Holders: 15
iRobot Corporation (NASDAQ:IRBT) is a Massachusetts-based provider of robots and home innovation products in the United States, Europe, the Middle East, Africa, Japan, and international markets. Since home innovation products are considered to be discretionary rather than staples, demand is likely to fade during recession.
JPMorgan analyst Paul Chung on May 6 downgraded iRobot Corporation (NASDAQ:IRBT) to Underweight from Neutral with a price target of $45, down from $65, after the company’s Q1 results were posted. According to the analyst, iRobot Corporation (NASDAQ:IRBT)’s Q2 guidance was decidedly lower than forecasts and fiscal 2022 guidance was slashed due to ongoing softness in Europe. Higher promotional spend is also expected to weigh on margins. The analyst sees risks to achieving the “even more back end loaded than usual” outlook due to limited visibility. According to Paul Chung, iRobot Corporation (NASDAQ:IRBT) has restricted opportunities to increase prices in Europe, the Middle East, and Africa to offset the strengthening U.S. dollar given the “increasing elasticity of demand”.
Among the hedge funds tracked by Insider Monkey, 15 funds were bullish on iRobot Corporation (NASDAQ:IRBT) at the end of Q4 2021, with collective stakes worth $25 million, compared to 14 funds in the last quarter, with stakes in the company valued at $38.5 million. D E Shaw is a notable shareholder of iRobot Corporation (NASDAQ:IRBT), with 84,271 shares worth $5.5 million.
4. IAMGOLD Corporation (NYSE:IAG)
Number of Hedge Fund Holders: 15
IAMGOLD Corporation (NYSE:IAG) is a Toronto-based gold mining company that operates exploration properties across North America, South America, and West Africa. Hedge fund sentiment declined around IAMGOLD Corporation (NYSE:IAG) in Q4 2021, with 15 funds bullish on the stock, compared to 18 funds in the last quarter.
On May 5, Stifel analyst Ingrid Rico downgraded IAMGOLD Corporation (NYSE:IAG) to Sell from Hold with a price target of C$2.50, down from C$3.25. The analyst said that IAMGOLD Corporation (NYSE:IAG)’s “disappointing update continues to underscore poor execution” on the construction of its Cot gold project. The magnitude of the new capex estimate now adds funding risk, although IAMGOLD Corporation (NYSE:IAG) started this project with a robust balance sheet, the analyst told investors. She also believes that IAMGOLD Corporation (NYSE:IAG)’s operating cash flow forecast for 2022 could be challenged by inflation cost pressures and possible risks in terms of realizing operational targets at Rosebel and Westwood.
According to Insider Monkey’s fourth quarter database, Jim Simons’ Renaissance Technologies is the leading shareholder of the company, with more than 19 million shares worth $60 million.
3. Leggett & Platt, Incorporated (NYSE:LEG)
Number of Hedge Fund Holders: 21
Leggett & Platt, Incorporated (NYSE:LEG) is a Missouri-based retailer of bedding, furniture, flooring, and textile products. The company sells its merchandise to big box and e-commerce retailers, bedding brands, department stores, and home improvement centers. As a recession looms over the horizon, demand for home improvement products is widely sidelined by customers who allocate budgets to staples, which negatively impacts companies like Leggett & Platt, Incorporated (NYSE:LEG).
On May 4, Raymond James analyst Bobby Griffin downgraded Leggett & Platt, Incorporated (NYSE:LEG) to Market Perform from Outperform without a price target. The downgrade is due to the recent slowdown and uncertainty around home durables demand in 2022, in addition to further complications in the global supply chain creating a more balanced risk/reward scenario, which is not a reflection on Q1 results, the analyst told investors in a research note. He does not see a high likelihood of material upside to numbers over the short-term as the company guidance already accounts for a rebound in volumes.
According to Insider Monkey’s Q4 data, Leggett & Platt, Incorporated (NYSE:LEG) was found in the public stock portfolios of 21 hedge funds, holding combined stakes worth $136.7 million. Israel Englander’s Millennium Management is the largest shareholder of the company, with a position worth $47.8 million.
2. Matterport, Inc. (NASDAQ:MTTR)
Number of Hedge Fund Holders: 19
Matterport, Inc. (NASDAQ:MTTR) is a California-based spatial data company that offers multiple 3D and VR data platforms to design, build, and understand spaces. The company provides its services to the real estate, travel and hospitality, retail, insurance, industrial, architecture, engineering, and construction industries. These sectors are likely to see a demand slowdown amid recession, which does not bode well for Matterport, Inc. (NASDAQ:MTTR).
Wedbush analyst Daniel Ives downgraded Matterport, Inc. (NASDAQ:MTTR) on May 3 to Neutral from Outperform, lowering the price target to $6 from $10. Despite growth in Q1 2022, the analyst observed that there have been prominent headwinds for Matterport, Inc. (NASDAQ:MTTR). He believes that significant exposure to the real estate sector is a clear negative in this macro environment and the growth story projected for Matterport, Inc. (NASDAQ:MTTR) will take much longer to materialize.
According to Insider Monkey’s Q4 data, 19 hedge funds were bullish on Matterport, Inc. (NASDAQ:MTTR), with combined stakes worth $247.7 million, down from 22 funds in the last quarter, holding stakes in the company valued at $371.5 million. Chase Coleman’s Tiger Global Management is the leading shareholder of Matterport, Inc. (NASDAQ:MTTR), with 7.50 million shares worth $154.8 million.
Here is what Miller Opportunity Equity has to say about Matterport, Inc. (NASDAQ:MTTR) in its Q4 2021 investor letter:
“Matterport Inc. (MTTR) continued to be a strong contributor during the quarter after Matterport’s ability to contribute to the building of the metaverse was brought to light. The company reported 3Q results that missed consensus due to unexpected supply constraints and labor shortage in its capture services. The company reported total sales of $27.7M below consensus of $29.1M but with gross profit beating coming in at $15.2M versus $15.1M expected leading to an EPS loss of -$0.06 slightly better than consensus of -$0.07. The company lowered full-year revenue guidance to $107-110M down from $120-126M previously while also lowering FY22 topline guidance to 50% growth from 65% at the time of the PIPE transaction due to continuing supply constraints and labor shortage.”
1. Hanesbrands Inc. (NYSE:HBI)
Number of Hedge Fund Holders: 32
Hanesbrands Inc. (NYSE:HBI) is a consumer goods company, designing and selling apparel for men, women, and children. The company offers its products under the Hanes, Champion, Polo Ralph Lauren, DKNY, Alternative, Gear for Sports, Explorer, Maidenform, Rinbros, and Bellinda brands. Amid a recession, customers are likely to shift away from high-end clothing and accessories to generic brands.
Stifel analyst Jim Duffy downgraded Hanesbrands Inc. (NYSE:HBI) on May 5 to Hold from Buy with a price target of $13, down from $26, after its Q1 results were published. The analyst observed that the management has “sharply” slashed its guidance for operating cash flow. The analyst added that the risk-reward profile on Hanesbrands Inc. (NYSE:HBI) is “unfavorable until visibility to capacity for profit improvement in FY23” considering the staggering inflation in input costs, pressure to mass channel consumer spending capacity, and unfavorable change to leverage profile.
According to Insider Monkey’s records, 32 hedge funds were long Hanesbrands Inc. (NYSE:HBI) at the end of Q4 2021, with collective stakes worth $450.1 million, compared to 34 funds in the earlier quarter, with stakes in the company valued at $501 million. Ric Dillon’s Diamond Hill Capital is the biggest shareholder of the company, with approximately 22 million shares worth $366.3 million.
You can also take a look at 11 Best Video Game Stocks To Invest In and 12 Best American Stocks To Buy in 2022.
