Avoid These 3 Downgraded Stocks The stock market's character has changed in 2021. For investors, it means they need to be even more selective and carefully assess their own holdings. Ashford Hospitality Trust (AHT), Ideal Power (IPWR), and Viad (VVI) are 3 downgraded stocks that investors should avoid.
By Patrick Ryan
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This story originally appeared on StockNews
Essentially, this is more of a "stock pickers' market" where picking the right stock matters much more. The POWR Ratings is one tool to help identify stocks under accumulation and distribution. The downgrades list is especially important as it can help you avoid weak stocks.
Below, we shine the spotlight on the following three stocks recently downgraded to a Strong Sell POWR Rating grade: Ashford Hospitality Trust (AHT), Ideal Power (IPWR), and Viad (VVI).
Ashford Hospitality Trust (AHT)
AHT is a real estate investment trust and corporation based in Maryland. AHT aims to capitalize on lodging industry opportunities. The company has half a dozen hotels in the fold including Radisson and Embassy Suites properties. In total, AHT has eight unique agreements about asset management and consulting.
AHT is trading at $3.63 yet its 52-week low is $1.27. The stock's 52-week high is $18. AHT has a beta of 2.28 meaning it will likely be quite volatile and the market fluctuates.
AHT's F POWR Rating grade is made even worse when you review the stock's individual POWR Rating components. AHT has an F Stability grade and Ds in the Quality and Value components. Click here to learn how AHT fares in the remainder of the POWR Ratings components such as Sentiment, Growth, and Momentum.
Of the 22 publicly traded companies in the REITs - Hotel space, AHT is ranked 19th. This sector as a whole has an F POWR Ratings grade. You can learn more about this space by clicking here. A total of four analysts have issued AHT recommendations with three advising investors Hold and only one insisting the stock is a Buy.
AHT had a 2020 price return of -90%. The stock's three-month price return is -9%. AHT's three-year price return is a dismal -94%. The reopening of the economy is certainly good news for AHT. However, it will take some time for the hospitality industry to recover from its losses in 2020.
Ideal Power (IPWR)
IPWR develops technology for power conversion dubbed Power Packet Switching Architecture. IPWR also makes photovoltaic inverters along with battery converters that are useful in the context of energy storage on the grid and charging electric vehicles as quickly as possible. However, IPWR is a POWR Ratings disappointment with an F overall grade and Fs in the Quality, Value, and Stability components. Click here to find out how IPWR grades out in the Momentum, Growth, and Sentiment components.
Of the 86 publicly traded companies in the Industrial - Machinery segment, IPWR is ranked 84th. You can learn more about this segment by clicking here.
IPWR has fallen off a cliff since jumping to more than $20 this past winter. The stock gradually slid down to $15 and now trades around $11 after its winter leap. Though IPWR is generating revenue, the company's aggregate 2020 revenue was a mere $670,000. This growth stock might work out in the years or decades ahead yet it is not investable at this moment in time.
Viad (VVI)
VVI provides services for those in the exhibition organizing, recreation, and travel spaces. VVI clients are located in the United States and Canada. VVI has a couple of decent POWR Ratings components yet the stock has an F overall rating. VVI has an F Value component grade along with Ds in the Stability and Quality components. You can find out how VVI grades out in the Sentiment, Momentum, and Growth components by clicking here.
VVI is ranked second-last of 49 stocks in the Outsourcing - Business Services space. Investors who would like to learn more about VVI's industry can do so by clicking here.
VVI had a 2020 price return of -46%. The stock's three-month price return is -6.41%. VVI is also risky as its beta is fairly high at 2.04, meaning the stock is inherently volatile.
Perhaps the most concerning aspect of VVI is its lack of news. Check the newswire for the stock and you will find few updates going back an entire year. Stay away from this stock until some positive news is released.
AHT shares rose $0.06 (+1.72%) in premarket trading Wednesday. Year-to-date, AHT has gained 36.68%, versus a 12.48% 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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