Sell these stocks now, proven algorithm says

Clean energy solutions and services provider, Chinese video company headline this week’s list of "F" rated Strong Sells

This week’s downgrades to Strong Sell as determined by the POWR Ratings algorithm:

• Stem (STEM) – a provider of AI-driven clean energy solutions and services
• Unity (U) – a platform for creating and operating interactive, real-time 3D content
• Bilibili (BILI) – operator of a video community for young generations in China
• Archaea Energy (LFG) – a renewable natural gas, or RNG, company that partners with landfill and farm owners to help them transform potential sources of emissions into RNG, in order to "transform their facilities into renewable energy centers"
• Farfetch Limited (FTCH) – operator of a platform for the luxury fashion industry that includes an e-commerce marketplace for luxury brands, boutiques and department stores as well as New Guards Group, a platform for the development of global fashion brands
• Iveric bio (ISEE) – a biopharmaceutical company focused on the discovery and development of novel treatments for retinal diseases with "significant unmet medical needs"
• Independence Realty Trust (IRT) – a multifamily apartment real estate investment trust, or REIT

Learn more about the POWR Ratings

Recent news on these stocks:

September 30

BofA analyst Michael Fink reinstated coverage of Unity with a Neutral rating and $40 price target. The "historically low" valuation and the company’s longer-term growth opportunity are balanced by execution and integration risks, softness expected in advertising and casual gamer trends, Fink tells investors.

September 29

Independence Realty Trust announced the company’s apartment communities in Tampa and Orlando, Florida did not appear to have any significant damage as a result of Hurricane Ian. "We are grateful to report that all of our residents and employees in the impacted areas are safe, and that we have not identified any significant damage to our communities," said Scott Schaeffer, Chairman and CEO of IRT. "Our on-site teams were integral in preparing our communities for this storm and we thank them for their support. We will keep our stakeholders abreast of the status of our communities as we assess any residual impact from the hurricane and will provide an update in the event of a material change."

Guggenheim analyst Joseph Osha raised the firm’s price target on Stem to $17 from $15 and keeps a Buy rating on the shares following the company’s analyst day, telling investors that he views Stem as "the emerging industry leader in energy storage management."

Susquehanna analyst Biju Perincheril said Stem hosted its inaugural Investor and Analyst Day where they provided guidance through 2025. He said the company expects its software segment to gain momentum as it targets more software-only business, which should drive steady margin improvements over time. He said while still in the early stages, Stem is trading at a discount to other high-growth cleantech names, and he believes execution should narrow this gap. Perincheril maintains his Positive rating and $20 price target on Stem shares.

September 26

Citi analyst Guido Lucarelli initiated coverage of Farfetch with a Sell rating and $6 price target. The analyst says that while Farfetch has "best-in-class technology," it is difficult to see a clear path to profitability. The company has developed advanced technology in online luxury and its sales should continue to benefit from the structural growth of the luxury sector and increased e-commerce penetration, Lucarelli tells investors in a research note. However, the YNAP transaction is unlikely to be transformational to EBITDA margin and the deal is arguably more relevant for Richemont, says the analyst.

About "Sell these stocks now"

Each week, The Fly will announce the newest downgrades to Strong Sell in StockNews.com’s POWR Ratings algorithmic model.

This Fly exclusive recap identifies stocks with over a $1B market capitalization that have been downgraded this week to the Strong Sell, or "F," rating in the service’s proprietary model that analyzes 118 different factors, each of which contribute a little to the stock’s predicted likelihood of underperformance. A bell curve distribution of StockNews.com’s ratings shows that only the top 5% of the over 5,000 stocks rated by the system are assigned a "Strong Buy," or "A," rating while the bottom 5% are assigned a Strong Sell. The F-rated stocks would have tumbled an average of 18.98% a year since 1999, according to StockNews.com.

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