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OK, so let’s see if I follow this. Goldman Sachs today removed Unisys (NYSE:UIS) from it Least Favorite Technology Stock list, because it hit a stop-loss limit, up 12% since being added to the list on November 2. Goldman says it has added a stop-loss feature to its three lists - favorite tech growth, favorite tech value, least favorite - “to protect our lists from the volatility that can exhibited by technology stocks, particularly those with more of a growth bent.” So they now pull stocks from the list that run more than 10% in the wrong direction.

That’s fine, but the logic has a few flaws. Goldman maintains their Neutral rating on the stock, noting today that the company’s turnaround efforts appear to be gaining traction, but that the good news is offset by continued declined in hardware orders and weak margin and cash flow trends. For the stock to work longer term, the company needs to realize cost savings from restructuring, stabilize its hardware business and gain traction in its services business, Goldman says. The firm’s price target on Unisys shares is $6.10, “suggesting 18% potential downside from current levels.” So here’s the thing: if they thought it was a short before, and not much has changed fundamentally, now they should REALLY like it as a short. No guts, no glory.

Unisys shares today are up a cent at $7.41.

UIS 1-yr chart:

uis 1-yr chart

Source: Goldman, in Removing Unisys From Least-Favorite Stock List, Lacks Guts and Logic