Investors will be happy to learn the POWR Ratings have been calculated once again. The latest POWR Ratings identify several stocks that have been demoted down to F grades, meaning they are Strong Sells.
Our POWR Ratings system evaluated stocks based on 118 different factors. These factors provide ratings that help us determine if a stock is likely to perform well or poorly in the weeks and months ahead. A stock with a Sell or Strong Sell is more likely to underperform over the near term.
Without further ado, let's take a look at three stocks recently downgraded in the POWR Ratings. Those stocks are Asana (ASAN), NIO (NIO), and McEwen Mining (MUX).
Asana (ASAN)
ASAN offers a platform for work management in the form of software as a service. This platform makes it easier for employees to complete work. However, this San Francisco-based company is likely to struggle in the year ahead.
ASAN has an overall grade of F, which is a Strong Sell rating in our POWR Ratings service. The stock has D grades in the Quality, Value, Growth, and Stability components of the POWR Ratings. Click here to learn more about how ASAN fares in the Momentum and Sentiment components.
Of the 61 publicly traded companies in the Software - Business industry, ASAN is ranked 55th. This industry as a whole has a D rating. You can find the top-ranked stocks in the Software - Business industry by clicking here.
Analysts are bearish on ASAN, establishing an average target price of $27. If ASAN dips to this target price, it will have decreased by more than 19%. Investors should steer clear of ASAN until the company proves it can expand revenue and scale costs.
NIO (NIO)
NIO was all the rage at the height of the pandemic, yet the stock is clearly overvalued at its current trading price of $37 and change. NIO has an F grade in the Stability component of the POWR Ratings and D grades in the Quality, Sentiment, and Value components. You can find out how NIO fares in the Momentum and Growth components by clicking here.
Of the 82 publicly traded China stocks, NIO is ranked nearly dead last, coming in at 79th. Click here to find top-ranked stocks in the China industry. As a whole, this segment has a D rating. NIO has a year-to-date price return of -23.80% and a three-month price return of -40.14%.
NIO dipped 15% in March alone, capping off a two-month drop of more than 30%. Investors are taking profits off the table after NIO soared in 2020. Add in the fact that there is a semiconductor shortage, and there is even more reason to be bearish on NIO. The production shutdown might cut NIO's first-quarter car deliveries by 1,000.
McEwen Mining (MUX)
Gold and precious materials were quite attractive during the pandemic. Yet, interest in stocks in this space is beginning to dissipate. MUX is one of those stocks.
MUX has D grades in the Quality, Sentiment, Value, and Stability components of the POWR Ratings. Investors who would like to learn more about how MUX fares in the Momentum and Growth components can do so by clicking here.
Of the 54 publicly traded stocks in the Miners - Diversified industry, MUX is ranked 49th. Click here to find top stocks in this industry. This industry is F-rated. MUX's fourth-quarter earnings were disappointing as revenue came in short of estimates. The company's latest quarter loss was six cents per share, yet analysts anticipated a loss of two cents per share.
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ASAN shares were trading at $34.61 per share on Tuesday morning, up $0.78 (+2.31%). Year-to-date, ASAN has gained 17.12%, versus a 10.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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