The stock market has been under pressure due to macroeconomic uncertainty and looming recession fears. The consumer price index (CPI) rose 8.3% year-over-year in August. The rise in inflation was mainly led by increased prices of food, shelter, and medical care services, partially offset by a fall in gasoline prices.
The elevated level of inflation will likely spring the Fed back into action by aggressively hiking the benchmark interest rates. The Federal Reserve is expected to keep increasing interest rates aggressively until it achieves its long-term inflation target of 2%. This is expected to keep the stock market under pressure.
The overall risk-off environment has weighed on investors’ sentiment. However, many investors have been shorting stocks due to the uncertain macroeconomic environment to benefit from their price declines.
Heavily shorted stocks Lucid Group, Inc. (LCID), Riot Blockchain, Inc. (RIOT), and Blink Charging Co. (BLNK) don’t have enough chances to rebound anytime soon. So, investors looking to bottom fish should stay away from these stocks.
Lucid Group, Inc. (LCID)
LCID is a technology and automotive company that develops electric vehicle (EV) technologies. It designs, engineers, and builds electric vehicles, EV powertrains, and battery systems.
LCID’s loss from operations widened 124.6% year-over-year to $559.20 million for the second quarter ended June 30, 2022. Its total costs and expenses increased 163.6% year-over-year to $656.53 million.
The company’s net loss narrowed 15.8% year-over-year to $220.42 million. Its loss per share narrowed 95.4% year-over-year to $0.33. Also, its adjusted EBITDA loss widened 89.9% year-over-year to $414.08 million.
Analysts expect its loss per share for the quarter ended September 30, 2022, to widen 52.4% year-over-year to $0.32. It failed to surpass the consensus EPS estimate in three of the trailing four quarters. The stock has declined 56.3% year-to-date to close the last trading session at $16.63.
LCID weak prospects are reflected in its POWR Ratings. It has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
It has an F grade for Value, Stability, and Quality. It is ranked #53 out of 65 stocks in the Auto & Vehicle Manufacturers industry. Click here to see the other ratings of LCID for Growth, Momentum, and Sentiment.
Riot Blockchain, Inc. (RIOT)
RIOT is involved in cryptocurrency mining and the overall blockchain system through various investments. The company has deployed approximately 8,000 application-specific integrated circuit miners at its cryptocurrency mining facility in Oklahoma. In addition, its subsidiary Tess Inc. seeks to develop a blockchain-based escrow service for wholesale telecom carriers.
For the fiscal second quarter ended June 30, 2022, RIOT’s net loss came in at $366.33 million, compared to a net income of $19.33 million. Its adjusted EBITDA loss came in at $65.17 million, compared to an adjusted EBITDA of $2.38 million. The company’s adjusted loss per share came in at $0.50, compared to an adjusted EPS of $0.03.
For the current quarter, RIOT’s EPS is expected to remain negative. It failed to surpass Street EPS estimates in three of the trailing four quarters. Over the past year, the stock has lost 73.8% to close the last trading session at $7.56.
RIOT’s weak prospects are reflected in its POWR Ratings. It has an overall F rating, equating to a Strong Sell in our proprietary rating system.
It has an F grade for Stability, Sentiment, and Quality and a D for Value. It is ranked #80 out of 81 stocks in the Technology – Services industry. Click here to see the other ratings of RIOT for Growth and Momentum.
Blink Charging Co. (BLNK)
BLNK owns, operates, and provides electric vehicle (EV) charging equipment and networked EV charging services.
BLNK’s loss from operations increased 77.9% year-over-year to $21.96 million for the second quarter ended June 30, 2022. Its net loss increased 68.1% year-over-year to $22.62 million. Also, its loss per share widened 62.5% year-over-year to $0.52.
Analysts expect BLNK’s loss per share for the current quarter ending September 30, 2022, to widen 33.8% year-over-year to $0.48. It failed to surpass Street EPS estimates in three of the trailing four quarters. Over the past year, the stock has declined 24.6% to close the last trading session at $22.64.
It’s no surprise that BLNK has an overall F rating, which translates to Strong Sell in our proprietary rating system.
It has an F grade for Value, Stability, Sentiment, and Quality and a D for Growth. It is ranked last out of 90 stocks in the Industrial - Equipment industry. To see BLNK’s rating for Momentum, click here.
LCID shares were trading at $16.81 per share on Thursday afternoon, up $0.18 (+1.08%). Year-to-date, LCID has declined -55.82%, versus a -17.13% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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