Don’t Get Caught Owning These 5 Stocks This Week

Photo Credit: Shakapam

Each week Forcerank runs a variety of games covering different industries. What we have found, is that the lowest ranked companies in their respective games deliver the biggest negative price movement  for that week. This week the losers include Time Warner, Yelp, VMware, Evercore and Coach.

Time Warner (TWX) | Media: In the three weeks that Media game has been in existence, Time Warner’s average rank has progressively become worse. In the inaugural game, the cable provider garnered an average rank of 4.79 which then dropped to 5.31 and this week it holds down the bottom spot with an average user rank of 6.5. Since then, shares have dropped 3% and should continue to see greater declines. The stock is currently trading below its 20 and 50 day moving average combined with a negative MACD, spelling trouble for investors. Finally, share prices are still well above the volume profile, so a continued dip cannot be ruled out.

Yelp (YELP) | Social Media: Since bottoming out in February, shares of Yelp are up a resounding 160%. Despite the rebound, Yelp is still the worst ranked company in this week’s social media game, there is certainly a case to be made for a broad pullback. Conventional wisdom would suggest that such a large spike in a small amount of time is not sustainable. Closely watched technical indicators also support a dip on the horizon. There is still a very large gap yet to be filled just above $32 while an RSI of 63 is slightly reflective of an overbought stock.

VMware (VMW) | Most Heavily Shorted: For a second week, VMware was the worst ranked company in the most heavily shorted and large enterprise software contest. Shares are down  about 8% in the past 12 months driven by an ongoing slowdown in revenue growth. The stock has received a number of downgrades over this time, the most recent coming from Goldman Sachs at the start of September. The investment bank downgraded the stock from buy to neutral, similar to a move made by Citigroup a month earlier. Meanwhile, the company’s chart doesn’t do them any justice. There are multiple gaps below its current trading price that still need to be filled. Additionally, negative OBV and declining MACD support a downturn on the horizon.

Evercore (EVR) | Financials: This week, Evercore replaces Wells Fargo as the worst stock in the financial contest. The biggest news from this investment bank is the recent departure of its head of quant research. Shares are down nearly 2.5% in Monday morning trading and 6% year to date. Additionally, the company is trading below its 20 and 50 day moving average.

Coach (COH) | Apparel: Coach shares are down nearly 11% year to date after multiple quarters of weak quarterly earnings. Two weeks ago the stock was downgraded by Morgan Stanley to Underweight from Equal Weight. Luxury brands like Coach haven’t translated well in this current retail environment where discounters are king. Frequent discounts and growing outlet stores have kept sales afloat but have severely hampered margins. Meanwhile a bearish crossover of its 200 day average above its 20 day average is sign of near term weakness. The saving grace in Coach’s freefall is that it appears to be oversold, which means a reversal could be near.  

Disclosure: Each week, Forcerank runs a variety of games covering different industries. What we have found, is that the highest ranked companies in their ...

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Chee Hin Teh 7 years ago Member's comment

Thanks for sharing