As the volatility in the market creeps up due to the situation in the Crimea, investors need to consider if it is time for a look under the hood of their portfolios for stocks that should be removed. Many of the top firms that we cover on Wall Street have increased the number and scope of the stocks they are designating as Sell rated. After a very long run in the market from the 2009 lows, there is always the chance a healthy correction is right around the corner.
The analysts at Cantor Fitzgerald have a current list of stocks rated Sell that includes some very high-profile names. One thing for investors to consider, if they own any of these names, is have you made any solid money, and how would these stocks hold up in a broad market sell-off? Momentum and high valuation tech and biotech stocks often get clobbered in a big market correction.
Here are the six stocks that Cantor Fitzgerald says investors should sell now.
Twitter Inc. (NYSE: TWTR) has become one of the classic “love it or hate it” stories on Wall Street. The analysts at Cowen agree with Cantor Fitzgerald and are haters. They put a Sell 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 Cantor Fitzgerald price target is $45.00. The Thomson/First Call estimate is higher at $50.07, and Twitter’s share price closed at $53.53 on Friday.
EastGroup Properties Inc. (NYSE: EGP) is a real estate investment trust (REIT) that focuses on the development, acquisition and operation of industrial properties in the United States. As of December 31, 2007, it owned 202 industrial properties and an office building, as well as approximately 1.7 million square feet in properties in Florida, Texas, Arizona and California. REITs are often susceptible to problems in rising interest rate scenarios. Investors are paid a 3.5% distribution. The Cantor Fitzgerald price target is $54.50. The consensus target is $63.25. EastGroup closed Friday at $61.54.
Endo Health Solutions Inc. (NASDAQ: ENDP) announced last year that it would buy Canadian-based Paladin Labs for $1.5 billion. The stock reacted favorably as Wall Street loved the deal, which looks to be accretive to earnings in the first year. It was actually also one of the stocks to buy after the biotech sell-off. The Cantor Fitzgerald price target for the stock is $43, and the consensus price target is $69.50. Shares closed Friday at $73.76, down almost 3.5% last week.
Seattle Genetics Inc. (NASDAQ: SGEN) is a high-flying name that has a Sell rating at Cantor Fitzgerald. While the stock has rallied on the positive Adcetris sales and news, the Cantor Fitzgerald team feels that flat out, the valuation is not justified, especially when that one product comprises the lion’s share of overall corporate valuation. The Cantor Fitzgerald price target is an eye-popping $24. The consensus target is $44.50. The stock closed Friday at $51.78 a share.
Sysco Corp. (NYSE: SYY) is a name to Sell. The Federal Trade Commission is very wary of Sysco’s proposed acquisition of U.S. Foods. An antitrust watchdog group warned last month that the $8.2 billion acquisition would create a monopoly among broadline food distributors, which specialize in delivering food and food service supplies to institutional clients such as restaurants, universities and military bases. Investors are paid a 3.2% dividend yield. Cantor Fitzgerald has a $24 price target on the stock. The consensus figure is $37.22. Sysco closed Friday at $36.21.
United Natural Foods Inc. (NASDAQ: UNFI) distributes and retails natural, organic and specialty foods, as well as nonfood products, primarily in the United States and Canada. The company distributes approximately 65,000 products in six product categories, including grocery and general merchandise, produce, perishables and frozen foods, nutritional supplements and sports nutrition, bulk and food service products, and personal care items. The Cantor Fitzgerald call may be a straight valuation sell. Their price target is $53, and the consensus is at $73.76. The stock closed Friday at $74.99.
Whether the call for a Sell rating is based on valuation or a broken story, one thing is important to consider. The market seems to be teetering again, and the action feels heavy. Investors that own these stocks may want to review their profit and loss to see if they are in a position to take the holding off the table. If they can, perhaps better safe than sorry.
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