World renowned brokerage firm and investment bank Goldman Sachs is zeroing in on several tech stocks, but not in the way that most people would think. The firm is picking stocks to remove from your portfolios — or even to short.
24/7 Wall St has picked out some of the tech stocks that Goldman Sachs has a Sell rating on, as well as seeing some downside as all the Goldman Sachs price targets imply a downside of 10% or greater from each of the stocks’ closing price as of April 10. We have included the most recent short interest data, 52-week ranges, consensus prices, as well as some color.
KLA-Tencor Corp. (NASDAQ: KLAC) saw its short interest increase to 4.31 million, with 3.0 days to cover. The previous reading was 4.28 million with 3.2 days to cover. These past three readings have been the lowest for the past 52-weeks. Note that this stock is barely $2 off of its 52-week low, and the lowest analyst price target is $48. The stock trades at 14 times next year’s earnings, after having fallen 15% so far year to date. Shares of KLA-Tencor were up 0.6% at $59.38 Tuesday. The stock has a consensus analyst price target of $70.05 and a 52-week trading range of $57.10 to $84.21.
Teradata Corp. (NYSE: TDC) reported short interest of 22.1 million shares, with 14.4 days to cover, compared to the previous reading of 23.2 million with 15.3 days to cover. Teradata has been a consistent disappoint; some would liken it to be being stuck in the mud. This stock is characterized by sluggish revenue, and it only trades at 15 times next year’s earnings. The stock is only up 1% year-to-date. Shares of Teradata were down 0.6% Tuesday, at $43.88 in a 52-week trading range of $37.66 to $48.07. The stock has a consensus price target of $43.32
NVIDIA Corp. (NASDAQ: NVDA) saw its shares jump up to a short interest reading of 53.6 million shares, with 6.0 days to cover. The previous reading was 47.2 million with 6.2 days to cover. The current reading is the highest, barring a single spike to 71.5 million in September. The problem is that AMD with its ATI unit won the last cycle for the PlayStation and Xbox cycle refreshes, forcing NVIDIA to focus more on the PC market. The stock trades around nearly 19 times its 2016 earnings. It is possible that NVIDIA has gained too much this year, up 13%, that the firm does not feel comfortable with its valuation. NVIDIA saw its shares fall 1% to $22.34. The consensus analyst price target is $23.24, and the 52-week trading range is $16.77 to $23.61.
Red Hat Inc. (NYSE: RHT) had a short interest reading of 6.72 million shares, with 2.6 days to cover, for the most recent settlement date. The previous reading was 7.19 million with 7.7 days to cover. It trades at 37 times a blended 2015 and 2016 earnings. This stock is up 8.5% year-to-date, and it is within nearly $3 of its consensus target. Again Red Hat might be a case in which the stock might have grown too much this year for Goldman Sachs to be comfortable with its valuation. Shares of Red Hat were down 0.3% Tuesday, $74.82 on a 52-week trading range of $47.45 to $77.82. The consensus price target is $78.10.