20 Stocks Which May Be Threatening Your Portfolio

When identifying possible sell/short opportunities (torpedoes), The Applied Finance Group (AFG) starts by running a screen using its proprietary Sell Criteria variables starting with Economic Margin. Economic Margin is a measure of corporate performance that identifies how profitable a company is by measuring how much the company earns above or below its cost of capital. In addition to corporate performance, AFG looks to identify those companies that are unattractively priced using our valuation model. Lastly, AFG evaluates how well companies run their business using its Management Quality score, identifying companies that have management teams that destroy wealth.

The 20 firms listed below all meet AFG’s Strong Sell Criteria. In addition, these companies all earn less than their cost of capital which means they earn a negative Economic Margin and all of these companies have a Z-Score (Altman Z-Score) or risk of bankruptcy in the next 2 years, falling in the at-risk range. AFG has a track record of identifying winners and losers in the market.

If any of these firms are holdings in your portfolio, pay extra attention to these companies as they contain all of the characteristics of a bad investment and may be a potential torpedo lurking in your portfolio. AFG has proven successful since 1996 at identifying good companies as well as sell opportunities, providing a solid buy/sell spread.

20 Stocks To Avoid In The Russell 2000 (ex. Financials)

Comments

[TJB:]

Nobody, I repeat nobody, has ever heard of the Applied Finance Group. So who cares what they think is a "strong sell". As opposed to what, a "weak sell"? This sounds like something you would read on a message board, .

May 04 09:10 AM

[tazman:]

I'm glad I didn't sell based on your recommendation. ACAD is up 150% today. Good call.

May 04 10:07 AM

[westal:]

I agree TJB. Sounds more like stock manipulation than good financial advice.

May 04 10:12 AM

[sapereaude:]

Horseshit.

May 04 10:23 AM

[jq1234:]

The problem with the criteria is it uses the same criteria for different industry. It's laughable to use "economic margin" to evaluate for example developing biotech companies. They are valued by their pipelines and probabilities to bring the pipelines to market, not by economic margin.

May 04 06:11 PM

[SJD:]

Just more clutter to sift through.

May 05 09:07 AM

[gloriason:]

Acadia Pharmaceutical is undervalued even after rising 150%. Did you even read the partnership agreement that was just announced?

May 05 10:15 AM

[nomindgames53:]

CPST is ready to take off....keep an eye on this one....buy now

May 18 11:50 AM

[Jimmy / pus...:]

Anyone have good opinion on CPST. Please let me know!! Thanks.
A good buddy suggested that I buy a couple hundred $ now of it.
[e-mail]

Jun 20 06:07 PM