Sell These Stocks Now Before It’s Too Late

Each week Forcerank runs a variety of games covering different industries. What we have found, is that the lowest ranked companies in their respective games deliver the biggest negative price movement and vice versa for those in the top position. This week we look at a list of companies that are consistently at the bottom or trending lower in their respective games.

Photo Credit: samantha celera

Panera (PNRA) | Restaurants: This year has been a difficult one for the fast casual industry which continues to lose market share to fast food and casual dining establishments. Panera has shared in the industry wide downturn despite a series of better than expected earnings reports. The 7% gains that Panera stock made this year pales in comparison to the 11% jump by the S&P 500. Shares should continue to see increasing downside driven by bearish support from technical indicators. A drop to negative territory by On Balance Volume couples with a bearish crossover in the MACD both support negative price action in the coming days/weeks. Meanwhile basic gap trading would view the gap at $202 as a 3% downside from its current trading price.

GoPro (GPRO) | Hardware: What’s a list of potential losers without GoPro or Fitbit. Needless to say, GoPro is one of the most beaten down stocks in recent months, owing to a disastrous third quarter that missed analysts’ targets by a wide margin but also featured reduced management guidance for the key holiday months. It’s clear that the Karma Drone and Hero 5, GoPro’s newest products, aren’t living up to their lofty expectations. Forcerank users remain bearish on the stock, pushing its average user rank lower and lower each week. This week the action camera maker sports a rank of 8.1, which is quite possibly the worst grade in the history of Forcerank. Most of the downside continues to be supported by a breakdown in its technicals. Last week was capped off with the 200 day moving average taking over the 50 day average while on balance volume turned negative. Throughout its downturn, the stock has breached multiple important support levels.

VMware (VMW) | Large Enterprise Software: The Forcerank community continues to believe VMware will retrace the gains made after reporting sound third quarter results. In that time, VMware also partnered with Amazon and received several bullish analyst upgrades. Shares have stayed in the upper Bollinger band for over a month now, reflecting overbought conditions. Additionally the stock’s 3 months volume profile is consistent with $73 per share or 9% downside from its current trading price. Given VMware’s robust underlying fundamentals, the potential negative momentum may not be long lived but should still be considered by investors or traders.

Ctrip (CTRP) | Ecommerce: Travel services in China are expected to be one of the fastest growing industries in the region but that hasn’t helped Ctrip investors. The stock is down 10% in the past 3 months on a number of weak earnings reports. In two of the past 3 quarters the Chinese travel agency posted a quarterly loss over 15 cents per share. Shares still continue to trade at 105 times future earnings, a difficult measure to justify given its weak underlying fundamentals. In addition to weak financial performance, Ctrip operates in an increasingly competitive space that includes Alibaba and Baidu.

Skechers (SKX) | Apparel: It wasn’t long ago that Skechers stock jumped 20% in a single week and now the shoemaker ranks in the bottom three of the apparel game. Fundamentally speaking, Skechers still remains challenged given the evolving retail environment and increasing competition from Nike and Under Armour. The Estimize community believes the fourth quarter will extend its losing streak to three consecutive misses. In the meantime the stock should retrace some of its gains from the week prior with shares well beyond overbought territory.

Disclosure: None. 

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.