The bull market is now more than five years old, and getting a repeat performance of almost 30% in the S&P 500 in 2013 seems next to impossible for 2014. Investors get to hear all sorts of analyst calls that are about stocks to buy. The ratings are generally called Buy, Strong Buy, Conviction Buy, Outperform, and the like.
What investors rarely get to hear about is when an analyst believes it is time to sell or avoid a stock. 24/7 Wall St. has tracked many new analyst calls issued by brokerage firms and research firms that feature stocks to sell.
Investors have to keep in mind that many brokerage firms do not have formal Sell ratings. Their “sell” ratings may be disguised as Underperform or Avoid, but these are lingo terms for Sell ratings. Sometimes Sell ratings are based on valuation, and sometimes they are based on new information that has changed a company’s outlook for the worse.
These are this last week’s key Sell ratings, and their equivalents, we tracked that were issued in Wall Street research notes.
Albany Molecular Research Inc. (NASDAQ: AMRI) took it on the chin on Friday after the contract research and manufacturing company for drugs was downgraded to Underperform from Neutral at Sterne Agee. While shares had recovered off the low, the stock still traded down about 10% at $17.90 in late-Friday trading. It closed at $19.91 prior to the downgrade, and the 52-week range is $8.92 to $19.10.
BlackBerry Ltd. (NASDAQ: BBRY) remains a huge battleground stock, with some investors still questioning whether the company is even viable long-term. After the company announced that it has a buyer for its real estate, the CLSA (Credit Agricole) team issued an upgrade Friday morning that felt like no upgrade at all. It raised BlackBerry’s rating from Sell to Underperform with a $6 price target. BlackBerry shares were at $9.42 around the call, so it projected a loss of one-third of the value. What kind of upgrade is that? It feels like moving from a Strong Sell to a Less-Strong Sell rating.
Michael Kors Holdings Ltd. (NYSE: KORS) was started as Underweight at Barclays, and the price target was put at $85, versus a $98.56 close. This is the equivalent of a Sell rating, and the consensus price target is closer to $105. Barclays now matches the street’s lowest analyst price target. Shares were trading at just under $99 late on Friday, implying that much of the damage may have been deemed as a one-day (so far) event.