It has been undeniable that the stock market has been very strong. The nine-year bull market saw major indexes hit all-time highs on multiple occasions in 2018, and this is now the longest running bull market without interruption on record. Investors have become used to hearing brokers and analysts telling them to buy stocks. What is harder for investors to determine is when it’s time to sell a stock.
24/7 Wall St. tracks dozens of analyst reports each day, which turns into hundreds of analyst calls made each week, and some calls are made with Sell, Underweight, and Underperform ratings. These analysts either believe all the upside already has been seen or they expect the stock to drop. It goes without saying that a Sell rating can spook even the most bullish of investors.
During the week of August 24, 2018, seven ratings stood out, as analysts and their brokerage firms told their clients to sell a particular stock. There were, of course, other ratings with caution, but these were the ones that stood out the most.
Remember that analysts are not always right in their calls. Sometimes they even get their views quite wrong. Here are seven actively traded or well-known stocks that analysts and brokers have told their clients to sell.
Apollo Investment Corp. (NASDAQ: AINV) was started with a Sell rating and assigned a $5 price target at Citigroup on August 23, while the prior closing price was $5.75. The shares were trading at $5.63 late on Friday, and the stock has a 52-week range of $5.18 to $6.20. Investors will want to consider that Apollo Investment is one company that screens out as a business development company with a 10% dividend yield. Its shares were last seen basically flat in 2018.
CenturyLink Inc. (NYSE: CTL) was downgraded to Sell from Neutral with a $19 price target at MoffattNathanson on August 22. This compared with the $23.98 prior close, but the shares were trading at $22.93 late on Friday. The consensus target price was $21.28 around the time of the call, and the 52-week trading range was $13.16 to $24.20. Investors will want to keep in mind that this telecom and broadband provider has a dividend yield of more than 9%, and its shares have risen handily during 2018. CenturyLink shares had risen about 22% over the course of the past month, and the shares were up almost 40% so far in 2018.
Constellation Brands Inc. (NYSE: STZ) was downgraded to Negative from Neutral with a $171 price target at Susquehanna on August 20. That represented handy downside from the prior close of $203.93, but the shares were up at around $207.00 late in the week, after having briefly dipped under $200 on the heels of this call. Constellation Brands recently made a multibillion investment into Canopy Growth for cannabis exposure, and it has a 52-week trading range of $195.96 to $236.62 and a market cap of almost $40 billion. Interestingly enough, it was higher despite a global study showing that any consumption of alcoholic beverages is bad for your health. This was a $221 stock prior to its Canopy Growth investment. Constellation Brands was last seen down about 10% so far in 2018.
J.C. Penney Co. Inc. (NYSE: JCP) already has seen its shares gutted over time, and its previous week’s earnings report offered no help. A prior analyst downgrade brigade came out fiercely against the stock, and now Citigroup has reiterated its Sell rating on J.C. Penney. The call represented serious downside, as Citi slashed its target to $0.50 from $2.00. That said, its shares were trading up over 3% at $1.84 late on Friday, and that was the highest price this week. J.C. Penney shares were last seen down over 40% so far in 2018, and they have lost over half of their value over the course of the past year.
Lennox International Inc. (NYSE: LII) was started with an Underweight rating and assigned a $201 price target at Morgan Stanley on August 21. The prior close was $225.32, but Lennox shares traded just under $220 late on Friday. The market cap is almost $9 billion, and the 52-week range is $160.38 to $225.78. Lennox is a household name when it comes to air conditioners and climate control systems. Its shares were last seen up about 6% year to date, but they were up 35% from a year ago.
Public Storage (NYSE: PSA) was downgraded to Sell from Neutral by Goldman Sachs on August 22, and the firm lowered its prior downside target of $210 to $198 in the call. The shares previously closed at $220.87, and the stock was near $213.00 late on Friday. Public Storage has a 52-week trading range of $180.48 to $234.90 and had a consensus target price of $206.50 ahead of the call. Despite this real estate investment trust having a 3.6% dividend yield, there are continued concerns over just how much available space there is in the world of storage units. Its shares were up about 1% so far in 2018 and up about 3% year over year.
SecureWorks Corp. (NASDAQ: SCWX) was downgraded to Sell from Neutral by UBS on August 24, and the downside price target was put at $11. The prior close was at $13.55, and the shares traded closer to $13.25 late on Friday. SecureWorks is set to release its earnings on September 5, and the IT-security provider has a market cap of almost $1.1 billion. Its shares have a 52-week range of $7.83 to $15.88, and the consensus analyst target from Thomson Reuters was $11.73 on last look. While the consensus forecast is for revenue growth to average about 10% in 2019 and 2020, SecureWorks still is expected to be running at negative profitability in each year. The shares were up roughly 50% so far in 2018.
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