The U.S. equity market ended a mixed session last Friday as investors awaited Fed’s next policy move. The S&P 500 closed down about 0.3%, the Dow climbed 0.4%, while the tech-heavy Nasdaq Composite shook off 1.3% due to the underperformance of tech stocks. St. Louis Fed President James Bullard said recently that the Fed might want between 3% and 3.25% on the Fed funds rate in the second half of this year.
Moreover, the Bank of America Corp. (BAC) analysts expect a recession, given the current bear market and inflationary conditions running hot due to the COVID-19 recovery and supply chain disruptions. This might cause another stock market correction, leading the S&P 500 to fall below the 4000 level at the end of this year.
That’s why today we're highlighting 3 exciting stocks from our Top 10 Shorts screen, which is just 1 of the 10 screens in our POWR Screens 10 service (more on that below). Fundamentally weak and overvalued stocks Plug Power Inc. (PLUG), AppHarvest, Inc. (APPH), and Beyond Meat, Inc. (BYND) might be ideal candidates for shorting this month.
Plug Power Inc. (PLUG)
PLUG is a hydrogen fuel cell turnkey solutions provider used for electric mobility and stationary power markets in North America and Europe. The company’s offerings include GenDrive, a liquid hydrogen-fueled proton exchange membrane (PEM) fuel cell, GenFuel, a hydrogen fueling delivery and dispensing system, and GenCare, an IoT-based maintenance and service program.
On February 17, PLUG announced that it had signed a collaboration agreement with Atlas Copco Mafi-Trench Company LLC, a turboexpander technology center in the Gas and Process division of Atlas Copco AB (ATLCY) and brazed heat exchanger and cryogenic cold boxes producer Fives. The collaboration intends to develop hydrogen liquefaction plants jointly. However, it might take some time before substantial gains can be realized from this.
In terms of its forward EV/Sales, PLUG is currently trading at 13.07x, 694.4% higher than the industry average of 1.65x. Its forward Price/Sales multiple of 16.41 is 1,164.7% higher than the industry average of 1.30.
For the fiscal fourth quarter ended December 31, PLUG’s total operating expenses increased 142.1% year-over-year to $112.98 million. For the fiscal year ended December 31, the company’s net cash used in operating activities increased 130.4% from the prior year to $358.18 million, while net cash used in investing activities rose 1,726.1% from the prior-year period to $1.74 billion.
The consensus EPS estimate of a negative $0.15 indicates a 25% year-over-year decrease. Moreover, PLUG has missed consensus EPS estimates in each of the trailing four quarters.
The stock has declined 19.4% over the past year and 7.8% year-to-date to close Friday’s trading session at $26.02.
PLUG’s POWR Ratings reflect this bleak outlook. The stock has an overall rating of F, 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.
PLUG has a Value, Stability, Sentiment, and Quality grade of F and a Growth and Momentum grade of D. In the 91-stock Industrial – Equipment industry, it is ranked 90. Click here to see more of PLUG’s component grades.
AppHarvest, Inc. (APPH)
APPH operates as an applied agricultural technologies company. The company develops and operates indoor farms to grow non-GMO produce free of chemical pesticide residues. The company’s product offerings include tomatoes and other fruits and vegetables, including berries, cucumbers, peppers, and salad greens.
APPH’s forward EV/Sales multiple of 16.23 is 793.6% higher than the industry average of 1.82. Its forward Price/Sales is trading at 16.70x, 1,209% higher than the industry average of 1.28x.
APPH’s loss from operations increased 1,040.6% year-over-year to $91.66 million in the fiscal fourth quarter ended December 31. Net loss and net loss per common share came in at $88.34 million and $0.88, up 848.6% and 319% from the same period the prior year.
Analysts expect APPH’s EPS to decrease 19.1% year-over-year to a negative $1.31 for the fiscal year 2022. Street expects its EPS to remain negative at least until the fiscal year 2023.
APPH’s shares have declined 74% over the past year and 18% over the past month to close Friday’s trading session at $4.41.
It’s no surprise that APPH has an overall F rating, which translates to Strong Sell in our POWR Rating system.
APPH has an F grade for Value, Momentum, Stability, and Quality and a D grade for Growth and Sentiment. It is ranked #85 out of the 86 stocks in the Food Makers industry. To see more of APPH’s component grades, click here.
Beyond Meat, Inc. (BYND)
BYND is the manufacturer, marketer, and seller of plant-based meat products in the United States and globally. The company offers a selection of plant-based meat across the beef, pork, and poultry platforms.
On April 7, BYND announced the settlement of Derivative Actions filed on behalf of the company. The proposed settlement requires the company to adopt certain corporate governance reforms and procedures. The company is expected to pay $515,000 to the Plaintiffs’ Counsel for their attorneys’ fees and expenses.
In terms of its forward EV/Sales, BYND is currently trading at 5.36x, 194.9% higher than the industry average of 1.82x. Its forward Price/Sales multiple of 4.64 is 263.4% higher than the industry average of 1.28.
For the fiscal fourth quarter ended December 31, BYND’s net revenues decreased 1.2% year-over-year to $100.68 million. Adjusted net loss and adjusted net loss per common share rose 276.3% and 273.5% from the prior-year quarter to $80.37 million and $1.27.
Street EPS estimate for the fiscal quarter ended March 2022 of a negative $0.98 reflects a 133.3% year-over-year decrease. In addition, BYND has missed consensus EPS estimates in each of the trailing four quarters.
Over the past year, BYND’s stock has declined 66.9% and 33.8% year-to-date to close Friday’s trading session at $43.11.
BYND’s poor prospects are reflected in its POWR Ratings. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system.
BYND has a Growth, Value, Stability, Sentiment, and Quality grade of F. It is ranked last in the Food Makers industry.
In addition to the POWR Rating grades we’ve stated above, one can see the BYND rating for Momentum here.
Want more stocks like these?
These three stocks are just a fraction of what you will find in our coveted Top 10 Shorts strategy. And the value strategy is just a fraction of what you get with our popular service; POWR Screens 10.
POWR Screens provides 10 market beating strategies with exactly 10 stocks each. Truly something for every investor with verified performance.
Learn More About POWR Screens 10 >>
PLUG shares were trading at $26.29 per share on Monday afternoon, up $0.27 (+1.04%). Year-to-date, PLUG has declined -6.87%, versus a -6.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.
3 Overvalued Stocks to Consider Shorting in April StockNews.com
