After a terrible first half of the year, the benchmark indexes have staged a recovery over the past month. The Dow Jones Industrial Average (DJIA) has been up 5.8% over the past month, while the S&P 500 (SPX) and the Nasdaq Composite (COMP) gained 7.9% and 10.9%, respectively.
During the year’s first half, the sell-off frenzy resulted from investors’ concerns over several macroeconomic and geopolitical headwinds. Notably, the Fed’s aggressive interest rate hikes, multi-decade high inflation, supply chain disruptions, and the war between Ukraine and Russia worried investors.
However, the indexes bounced back in July with better-than-expected corporate earnings and a tight job market helping offset the recession fears. The S&P 500 marked its best month since November 2020, with 9.1% gains in July.
Currently, the overall macroeconomic conditions look highly uncertain. The U.S. economy shrank by 0.9% in the second quarter, marking the second consecutive quarter of economic contraction.
Many economists believe that the economy may have already entered into a recession. The July jobs data came in hotter-than-expected, leading analysts to believe that inflation may not have peaked, which might encourage the Fed to hike the benchmark interest rate in its next meeting aggressively.
Since the stock market is expected to witness significant pressure in the upcoming months, investors should consider selling fundamentally weak stocks Lucid Diagnostics Inc. (LUCD), Ideal Power Inc. (IPWR), and PAR Technology Corporation (PAR) before they decline again.
Lucid Diagnostics Inc. (LUCD)
LUCD operates as a commercial-stage medical diagnostics technology company. The company focuses on patients with gastroesophageal reflux disease, also known as chronic heartburn, acid reflux, or reflux, who are at risk of developing esophageal precancer and cancer, specifically highly lethal esophageal adenocarcinoma. Its leading products include EsoGuard and EsoCheck.
LUCD’s operating expenses increased 226.2% year-over-year to $11.91 million for the first quarter ended March 31, 2022. The company’s adjusted loss widened 189.5% year-over-year to $8.23 million. Also, its adjusted loss per share widened 15% year-over-year to $0.23.
Analysts expect LUCD’s EPS for the quarter ending September 30, 2022, to remain negative. It failed to surpass Street EPS estimates in three of the trailing four quarters. Over the past month, the stock has gained 22.1%, while it has lost 67.3% over the past nine months to close the last trading session at $3.31.
LUCD’s weak fundamentals are reflected in its POWR Ratings. The stock has an overall D rating, equating to a 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 and Quality and a D for Growth and Momentum. It is ranked #136 out of 145 stocks in the D-rated Medical – Devices & Equipment. Click here to see the other ratings of LUCD for Stability and Sentiment.
Ideal Power Inc. (IPWR)
IPWR focuses on the development and commercialization of its B-TRAN technology. The company is engaged in developing its bidirectional power switches and energy control solutions for electric vehicles, electric vehicle charging, renewable energy, and energy storage. It develops Bi-directional bi-polar junction TRANsistor solid state switch technology.
For the fiscal first quarter ended March 31, 2022, IPWR’s grant revenue decreased 48.3% year-over-year to $125K. The company’s net loss widened 106% year-over-year to $1.90 million. Also, its loss per share widened 82.3% year-over-year to $0.31.
For the quarter ended June 30, 2022, IPWR’s EPS is expected to remain negative. It failed to surpass consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has lost 33.6%, but it has gained 33.3% over the past three months to close the last trading session at $11.25.
IPWR’s POWR Ratings reflect these bleak prospects. It has an overall F rating, equating to a Strong Sell.
It has an F grade for Value and Quality and a D for Growth and Stability. Within the Industrial – Machinery industry, it is ranked #75 out of 79 stocks. To see the other ratings of IPWR for Momentum and Sentiment, click here.
PAR Technology Corporation (PAR)
PAR provides systems and service solutions for the restaurant and government sectors. The company operates through two segments: Restaurant/Retail and Government. The Restaurant/Retail segment provides point-of-sale (POS) software, hardware, back-office software, and integrated technology solutions to the restaurant and retail industries. The Government segment is focused on intelligence solutions and mission systems contract support.
PAR’s operating expenses increased 16% year-over-year to $37.22 million for the second quarter ended June 30, 2022. The company’s adjusted EBITDA loss widened 61.3% year-over-year to $5.76 million. Also, its net loss widened 89.3% year-over-year to $18.84 million. In addition, its loss per share widened 79.4% year-over-year to $0.70.
Analysts expect PAR’s EPS for the quarter ending September 30, 2022, to decline 15.2% year-over-year to $0.42. Over the past nine months, the stock has declined 38.4% but has gained 30.3% over the past three months to close the last trading session at $40.19.
PAR’s POWR Ratings reflect its weak prospects. It has an overall D rating, equating to a Sell.
It has an F grade for Quality and a D for Growth and Value. It is ranked #77 out of 81 stocks in the Technology – Services industry. Click here to see the other ratings of PAR for Momentum, Stability, and Sentiment.
LUCD shares were unchanged in premarket trading Wednesday. Year-to-date, LUCD has declined -38.36%, versus a -11.36% 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.
3 Stocks You Should Consider Selling While You Still Can StockNews.com
