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Zacks.com featured highlights include Ligand Pharmaceuticals, Alarm.com Holdings, Radius Global, ADT, Madison Square Garden
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For Immediate Release
Chicago, IL – June 3, 2022 – Stocks in this week’s article are Ligand Pharmaceuticals (LGND - Free Report) , Alarm.com Holdings, Inc. (ALRM - Free Report) , Radius Global Infrastructure Inc. , ADT Inc. (ADT - Free Report) and Madison Square Garden Entertainment Corp. (MSGE - Free Report) .
Spot the Red Flags and Sell These 5 Toxic Stocks Right Away
One important criterion for successful investing is the accurate identification of overblown toxic stocks and the rightly priced ones. However, in practice, it is not easy to precisely distinguish these two categories of stocks. Investors who can correctly spot the overpriced stocks and shun them at the right time are the ones likely to make a profit. Ligand Pharmaceuticals, Alarm.com Holdings, Inc., Radius Global Infrastructure Inc., ADT Inc. and Madison Square Garden Entertainment Corp. are a few such toxic stocks.
Usually, toxic stocks are fraught with huge debt loads and are susceptible to external shocks. Also, the unjustifiably high price of the toxic stocks is short-lived as the intrinsic value of these stocks is less than their current price. Quite naturally, if you own such toxic stocks for a long period, you are sure to make a huge loss in your wealth.
The higher price of the toxic stocks can be attributed to either an irrational exuberance associated with them or some serious fundamental lacuna. If you own such stocks for long, you are likely to see a big loss in your wealth.
On the contrary, if you can accurately pinpoint the toxic stocks, you are likely to gain by resorting to an investing strategy called short selling. This strategy allows you to sell a stock first and then buy it when the price falls.
While short selling excels in bear markets, it typically loses money in bull markets.
So, just like picking up stocks with strong growth potential, pinpointing toxic stocks and abandoning them at the right time is the key to protecting your portfolio from big losses or making profits by short selling them.
Here are the five stocks out of the 26 that made it through the screen:
Ligand is a biotechnology company focused on the development and licensing of biopharmaceutical assets. This San Diego-based firm's business model is based on developing or acquiring royalty revenue-generating assets and coupling them with a lean corporate cost structure. Ligand's dependence on the Captisol program and Captisol-based partnerships is concerning.
The Zacks Consensus Estimate for LGND's 2022 earnings and sales implies a year-over-year decline of 60% and 40%, respectively. The Zacks Consensus Estimate for Ligand's 2022 earnings has moved south by 40 cents per share over the past 30 days. The consensus mark for earnings for the next year has also declined 66 cents over the 30 seven days. LGND currently carries a Zacks Rank #5 (Strong Sell) and has a VGM Score of C.
Alarm.com: Alarm.com offers interactive security solutions for home and business owners. The company offers security systems, which include image sensors, crash and smash protection, web control, mobile access and video monitoring. Alarm.com is based in Vienna..
The Zacks Consensus Estimate for Alarm.com's 2022 earnings implies a year-over-year decline of 5.5%. The estimate has moved south by a cent per share over the past 30 days. The consensus mark for earnings for the to-be-reported quarter signals a year-over-year contraction of 24%. ALRM currently carries a Zacks Rank #4 (Sell) and has a VGM Score of D.
Radius Global: Radius Global, through its subsidiary AP WIP Investments LLC, is an owner of a growing, diversified portfolio of primarily triple net rental streams from wireless operators and tower companies for properties. The company is headquartered in New York.
Over the trailing four quarters, Radius Global missed earnings estimates on three occasions and beat once, the average negative surprise being 210.7%. The Zacks Consensus Estimate for RADI's loss for fiscal 2022 is pegged at 7 cents a share. The estimate has deteriorated from earnings of 6 cents a share 30 days ago to a loss of 7 cents a share. The consensus mark for earnings for the next year has also declined 20 cents over the past 30 days. Radius Global currently carries a Zacks Rank #4 and has a VGM Score of C.
ADT: Based in the Unites States, ADT is a smart home solution providing company. With the buyout of Sunpro Solar in December 2021, the company is also a provider of residential solar solutions. It has a large network of security, home automation, and solar-installation professionals in the United States. As of Dec 31, 2021, ADT had around 6.6 million recurring revenue customers.
Over the trailing four quarters, ADT missed earnings estimates on all occasions, the average negative surprise being 129.1%. The Zacks Consensus Estimate for ADT's 2022 earnings has moved south by 60 cents per share over the past 30 days. The consensus mark for earnings for the next year has also declined 61 cents over the past 30 days. ADT currently carries a Zacks Rank #4.
Madison Square: Based in New York, Madison Squareprovides entertainment experiences. The company presents or hosts events at its diverse venues, New York's Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, CA and The Chicago Theatre. Also, under the MSG Entertainment umbrella is Tao Group Hospitality, with entertainment dining and nightlife brands, including Tao, Marquee, Lavo, Avenue, Beauty & Essex and Cathédrale.
Over the trailing four quarters, Madison Square missed earnings estimates on all occasions, the average negative surprise being 101.5%. The Zacks Consensus Estimate for MSGE's loss for fiscal 2022 is pegged at $3.28 a share. The estimate has moved south by $1.18 per share over the past 30 days. The consensus mark for earnings for the next fiscal year has also declined 38 cents over the past 30 days. Madison Square currently carries a Zacks Rank #4 and has a VGM Score of C.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include Ligand Pharmaceuticals, Alarm.com Holdings, Radius Global, ADT, Madison Square Garden
For Immediate Release
Chicago, IL – June 3, 2022 – Stocks in this week’s article are Ligand Pharmaceuticals (LGND - Free Report) , Alarm.com Holdings, Inc. (ALRM - Free Report) , Radius Global Infrastructure Inc. , ADT Inc. (ADT - Free Report) and Madison Square Garden Entertainment Corp. (MSGE - Free Report) .
Spot the Red Flags and Sell These 5 Toxic Stocks Right Away
One important criterion for successful investing is the accurate identification of overblown toxic stocks and the rightly priced ones. However, in practice, it is not easy to precisely distinguish these two categories of stocks. Investors who can correctly spot the overpriced stocks and shun them at the right time are the ones likely to make a profit. Ligand Pharmaceuticals, Alarm.com Holdings, Inc., Radius Global Infrastructure Inc., ADT Inc. and Madison Square Garden Entertainment Corp. are a few such toxic stocks.
Usually, toxic stocks are fraught with huge debt loads and are susceptible to external shocks. Also, the unjustifiably high price of the toxic stocks is short-lived as the intrinsic value of these stocks is less than their current price. Quite naturally, if you own such toxic stocks for a long period, you are sure to make a huge loss in your wealth.
The higher price of the toxic stocks can be attributed to either an irrational exuberance associated with them or some serious fundamental lacuna. If you own such stocks for long, you are likely to see a big loss in your wealth.
On the contrary, if you can accurately pinpoint the toxic stocks, you are likely to gain by resorting to an investing strategy called short selling. This strategy allows you to sell a stock first and then buy it when the price falls.
While short selling excels in bear markets, it typically loses money in bull markets.
So, just like picking up stocks with strong growth potential, pinpointing toxic stocks and abandoning them at the right time is the key to protecting your portfolio from big losses or making profits by short selling them.
Here are the five stocks out of the 26 that made it through the screen:
Ligand is a biotechnology company focused on the development and licensing of biopharmaceutical assets. This San Diego-based firm's business model is based on developing or acquiring royalty revenue-generating assets and coupling them with a lean corporate cost structure. Ligand's dependence on the Captisol program and Captisol-based partnerships is concerning.
The Zacks Consensus Estimate for LGND's 2022 earnings and sales implies a year-over-year decline of 60% and 40%, respectively. The Zacks Consensus Estimate for Ligand's 2022 earnings has moved south by 40 cents per share over the past 30 days. The consensus mark for earnings for the next year has also declined 66 cents over the 30 seven days. LGND currently carries a Zacks Rank #5 (Strong Sell) and has a VGM Score of C.
Alarm.com: Alarm.com offers interactive security solutions for home and business owners. The company offers security systems, which include image sensors, crash and smash protection, web control, mobile access and video monitoring. Alarm.com is based in Vienna..
The Zacks Consensus Estimate for Alarm.com's 2022 earnings implies a year-over-year decline of 5.5%. The estimate has moved south by a cent per share over the past 30 days. The consensus mark for earnings for the to-be-reported quarter signals a year-over-year contraction of 24%. ALRM currently carries a Zacks Rank #4 (Sell) and has a VGM Score of D.
Radius Global: Radius Global, through its subsidiary AP WIP Investments LLC, is an owner of a growing, diversified portfolio of primarily triple net rental streams from wireless operators and tower companies for properties. The company is headquartered in New York.
Over the trailing four quarters, Radius Global missed earnings estimates on three occasions and beat once, the average negative surprise being 210.7%. The Zacks Consensus Estimate for RADI's loss for fiscal 2022 is pegged at 7 cents a share. The estimate has deteriorated from earnings of 6 cents a share 30 days ago to a loss of 7 cents a share. The consensus mark for earnings for the next year has also declined 20 cents over the past 30 days. Radius Global currently carries a Zacks Rank #4 and has a VGM Score of C.
ADT: Based in the Unites States, ADT is a smart home solution providing company. With the buyout of Sunpro Solar in December 2021, the company is also a provider of residential solar solutions. It has a large network of security, home automation, and solar-installation professionals in the United States. As of Dec 31, 2021, ADT had around 6.6 million recurring revenue customers.
Over the trailing four quarters, ADT missed earnings estimates on all occasions, the average negative surprise being 129.1%. The Zacks Consensus Estimate for ADT's 2022 earnings has moved south by 60 cents per share over the past 30 days. The consensus mark for earnings for the next year has also declined 61 cents over the past 30 days. ADT currently carries a Zacks Rank #4.
Madison Square: Based in New York, Madison Squareprovides entertainment experiences. The company presents or hosts events at its diverse venues, New York's Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, CA and The Chicago Theatre. Also, under the MSG Entertainment umbrella is Tao Group Hospitality, with entertainment dining and nightlife brands, including Tao, Marquee, Lavo, Avenue, Beauty & Essex and Cathédrale.
Over the trailing four quarters, Madison Square missed earnings estimates on all occasions, the average negative surprise being 101.5%. The Zacks Consensus Estimate for MSGE's loss for fiscal 2022 is pegged at $3.28 a share. The estimate has moved south by $1.18 per share over the past 30 days. The consensus mark for earnings for the next fiscal year has also declined 38 cents over the past 30 days. Madison Square currently carries a Zacks Rank #4 and has a VGM Score of C.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1932814/spot-the-red-flags-sell-these-5-toxic-stocks-right-away
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.