Tesla And Nine Other Stocks To Sell
02/06/2016
Our subscribers often ask if they should sell specific stocks that they purchased based on someone else's recommendations. That got me to thinking about making a list of 10 stocks that I don't think anyone should be holding today. But first I looked back a year ago to find the 10 stocks that had received our worst ratings to see how they fared. Here they are:
A Year Ago: Ten Stocks With Our Lowest Ratings (Sorted Alphabetically) |
| Company |
Ticker |
Sector |
1-Year Performance |
| Akorn, Inc. |
AKRX |
Health Care |
-46% |
Castlight Health Inc. |
CSLT |
Technology |
-61% |
| Celladon Corp. |
CLDN |
Health Care |
-93% |
| Cepheid |
CPHD |
Technology |
-51% |
| Hoegh LNG Partners |
HMLP |
Transportation |
-34% |
| Keryx Biopharmac. |
KERX |
Health Care |
-67% |
| NGL Energy Partners |
NGL |
Energy |
-61% |
| NN, Inc. |
NNBR |
Basic Materials |
-55% |
| Stonegate Mortgage |
SGM |
Financial |
-59% |
| Winthrop Realty Trust |
FUR |
Services |
-5% |
| Average |
|
|
-52% |
|
| S&P 500 |
SPY |
Index |
-6% |
Performance was measured from Feb. 9, 2015 (the date we assigned the ratings to each stock) to Friday's closing prices on Feb. 5, 2016. Performance also includes dividends.
We rate nearly 4,000 stocks based on four areas:
- Value Rating
- Growth Rating
- Accounting Practices/Accounting Fraud Rating
- Financial Strength Rating
We then averaged the four ratings to create the list above. As you can see, all but one stock significantly underperformed the S&P 500. And the stock that beat the S&P 500 only beat it by 1%. Celladon was the biggest loser. Last year at this time, it was trading for $15.70 per share. Yesterday it closed at $1.11, a loss of 93%.
Now on to this year's rankings.
This Year: Ten Stocks With Our Lowest Ratings (Worst is First) |
| Company |
Ticker |
Sector |
| AgroFresh Solutions |
AGFS |
Technology |
SolarCity Corp. |
SCTY |
Technology |
| TubeMogul Inc. |
TUBE |
Technology |
| Tesla Motors Inc. |
TSLA |
Consumer Cyclical |
| Cheniere Energy, Inc. |
LNG |
Energy |
| Golar LNG Limited (USA) |
GLNG |
Transportation |
| WMIH Corp. |
WMIH |
Financial |
| Nevro Corp. |
NVRO |
Health Care |
| Synergy Pharmaceuticals Inc. |
SGYP |
Health Care |
| Greenpro Capital Corp. |
GRNQ |
Technology |
The list is ranked with the worst stock, AgroFresh, listed first. The big name on this list is Tesla Motors, Inc. (TSLA). From a fundamental standpoint, it's a horrible stock. The company has posted a loss in each of the last 4 quarters and in each of the last three years. Its operating cash flow has taken a huge hit over the last year. Tesla's accounting practices put it in the bottom 29% of the companies we rank. It relies on external financing way too much. And finally, out of the nearly 4,000 companies we rank, Tesla's cash-flow-to-debt ratio is dead last. This means it will likely have trouble paying its sizeable debt.
Don't fall for the media's fascination with Tesla. If you own it, sell it. If you were considering buying it, avoid it at all costs. Avoid the other nine stocks, too. You may even want to consider shorting them.
For stocks that we recommend buying, go here.
-Rex M. Jacobsen
Sr. Editor
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