Investing

Top Wall Street Analysts Say Sell These Stocks While You Still Can

Typically Wall Street research is a huge list of stocks to buy. From micro-cap to mega-cap, Buy ratings are what we typically see every morning when the daily research reports start flowing in. There is a good reason for this. Wall Street knows that investors are looking for positives. Oh sure, there is a large crowd of doom and gloomers, but they usually start making appearances once things have already gone downhill. They were out in full force last month as the S&P 500 dipped almost 6%.

The good thing is that most of the Wall Street firms that we cover try to keep a balance in their research. When they see something that is plain and simply bad, most of the firms call it out. We ran a screen through our Wall Street research database looking for the stocks that major firms are recommending that investors sell. One good thing about a Sell rating, there is no ambiguity.

Here are some high profile stocks that some top firms have put Sell ratings on.

Alcatel-Lucent S.A. (NYSE: ALU) is a stock that investors should sell, according to Jefferies. The firm thinks that all the good news on the stock that can come out has been released. While there may remain some growth areas for the company, the analysts at Jefferies feel that all the good news has long since been priced into the stock and investors with profits should take them. Jefferies has an incredibly low $1.10 price target for the stock. The Thomson/First Call estimate is at $4.82. Shares closed Monday at $4.37.

Baker Hughes Inc. (NYSE: BHI) is rated as a new Sell at Guggenheim. The firm is very negative on the prospects for the oil services giant, as well as the overall prospect for oil prices the rest of the year. Investors are paid a 1% dividend. Guggenheim drops its price target on the stock from $55 to $45. The consensus price target is $64.02. Baker Hughes closed Monday at $59.07.

Boardwalk Pipeline Partners (NYSE: BWP) got smoked big-time, and there could be more damage to come. The company cut its dividend huge and reported very poor earnings. Credit Suisse immediately cut the stock to Sell, and in its report was very negative about the future. Boardwalk also cut its distribution for the quarter to just $0.10 a share. The Credit Suisse price target is cut to $15, and the consensus is still at $29.41. There is a good chance that could get cut in half as well. Shares closed Monday down big at $13.01.

Digital River Inc. (NASDAQ: DRIV) is a name to sell at Merrill Lynch and is rated Underperform. The company recently beat earnings estimates but guided the street way down on numbers for 2014. The company anticipates a slowing in its commerce business. The Merrill Lynch price target for the stock is $15. The consensus target is $18. Digital River closed Monday at $16.37.

Sigma-Aldrich Corp. (NASDAQ: SIAL) is rated at Sell at UBS. The UBS team thinks the stock has reached full valuation. On the back of recent strong earnings, the UBS analysts did raise their price target, but the Sell rating stays and their thesis does as well. Double-digit revenue growth may be a thing of the past. The UBS price target for the stock is $80, and the consensus is at $89.28. The stock closed Monday at $93.07.

PetSmart Inc. (NASDAQ: PETM) is a Sell at Deutsche Bank. The firm sees a drop in pet adoptions hurting the retailer. Declines in pet adoptions suggest that the stores will be seeing weaker traffic, which will result in lower sales. The analysts believe that the company does about 400,000 adoptions a year, and they estimate that new pet parents spend perhaps $500 in the first year, meaning that adoptions driven sales could be $200 million, or 3% of total sales. Investors are paid a 1.2% dividend. The Deutsche Bank price target falls from $65 to $60. The consensus target is much higher at $72.83. PetSmart closed Monday at $64.68.

Sodastream International Ltd. (NASDAQ: SODA) is a Sell at Stifel, despite the gorgeous Scarlett Johansson being the new spokesperson. Rumors have swirled around Wall Street that Pepsi may be looking to buy the company. Some logic says that move would just cannibalize its own sales. The Stifel team thinks that it is highly unlikely. They have a $29 price target for the stock. The consensus figure is a very bullish $54.29. Sodastream closed Monday at $40.45.

Twitter Inc. (NYSE: TWTR) has become one of the classic “love it or hate it” stories on Wall Street. The analysts at Cowen are haters and put a Sell rating on the stock when they initiated coverage back in January. Their call was a good one as the stock got hammered after posting very disappointing earnings. The Cowen team also thinks the stock has a large amount of downside that is not yet priced in. Their price target is just $32. The consensus number is much higher at $49.83. Twitter closed Monday at $52.92.

Back in the 1990s, it was VERY rare to see a Wall Street firm put a Sell rating on any stock. Investment Bankers were in bed with analysts and the system to some degree was rigged. That has changed over the years, and the Chinese Wall between research and banking is much more formidable now, as it should be. Firms that point out the downside in stocks are doing right by their customers, as they are ethically required to do.

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