4 "Sell-Rated" Retail Stocks to Dump Now

NYSE: M | Macy's Inc  News, Ratings, and Charts

M – L Brands (LB), Macy’s (M),JC Penney (JCP), and Ascena (ASNA) are struggling due to decreased foot traffic for retail stores. Unlike other retailers, they’ve been unable to make up for it with online sales.

Certain retailers are facing a crisis due to the coronavirus.

The common link between them is that their businesses are dependent on in-store spending, and they don’t have a meaningful online presence. Another factor is that they appeal to the middle class which has been shrinking over the last couple of decades, while retailers focused on the upper and lower-end have done better.

They were already having a hard time as traffic to retail stores was decreasing, and online spending was exploding. Further, younger people are much more likely to browse online rather than wander around a mall. 

The coronavirus is a negative shock to these businesses that were already in a secular decline. Foot traffic to stores will be depressed over the coming months. They are ramping up their online operations to make up for the shortfall but that is a challenging, expensive endeavor with no guarantee of success.

Given these issues, investors should avoid these four retail stocks:

L Brands, Inc. (LB)

LB is a specialty retailer that focuses on women’s care and beauty products. LB reported an operating loss of $318 million in the first fiscal quarter of the year. It’s facing challenges relating to the poor performance of its Victoria’s Secret brand. To cut costs, LB is curtailing expenditure and closing stores.

L Brands, like many other retail operations, has been hit hard by the pandemic. Until the situation reverses, LB should be avoided. LB has lost 13.3% year to date which follows a 25.2% decline in 2019.

How does LB stack up for the POWR Ratings?

D for Trade Grade

D for Buy & Hold Grade

B for Industry Rank

C for Peer Grade

D for overall POWR Rating

Macy’s, Inc. (M)

Macy’s is facing an uncertain future as the company is closing stores in areas with increased case counts. M is also looking into various measures to reduce expenditure such as laying off around 4,000 employees.

It’s facing a steep challenge of getting customers into stores during this period, and it’s likely to underperform until things get back to normal.

M has lost 59.4% year to date. It has performed well with a price return of -66.2% over the last year.

M has been accorded an overall POWR Rating of F which indicates a Strong Sell. It has received F for Trade Grade and Buy & Hold Grade as well.

J.C. Penney Company, Inc.  (JCP)

JCP is in the midst of bankruptcy proceedings. The company has submitted its new business plan to lenders who need to approve it before July 14. Otherwise, it will be forced to liquidate. JCP has been severely hit by the coronavirus. It should be avoided.

JCP has lost 83.9% year to date and is down 82.2% in the stock price over the last year.

JCP has an overall POWR Rating of F which indicates a Strong Sell. It has received F for Trade Grade and Buy & Hold Grade as well.

Ascena Retail Group, Inc. (ASNA)

ASNA is a specialty retailer of apparel for women, along with tween boys and girls. It is the parent company of Ann Taylor and Lane Bryant. The company has a high degree of bankruptcy risk and may be forced to close around 1200 stores to reduce its debt. It may also sell brands such as Justice and Catherine to stave off this outcome.

ASNA has lost 87.7% year to date. The stock has also delivered a negative price return of 84.7% in 2019.

ASNA has received an overall POWR Rating of F along with an F for Trade Grade and Buy & Hold Grade. It has a D for Peer Grade and a C for Industry Rank.

Want More Great Investing Ideas?

9 “BUY THE DIP” Growth Stocks for 2020

Is the Bull S#*t Rally FINALLY Over?

7 “Safe-Haven” Dividend Stocks for Turbulent Times

Top 3 Investing Strategies for 2020


M shares . Year-to-date, M has declined -58.53%, versus a -0.31% rise in the benchmark S&P 500 index during the same period.

About the Author: StockNews Staff

The StockNews Staff is led by a team of investment experts including CEO, Steve Reitmeister and trading legend Adam Mesh. The goal of our commentary is to provide you with valuable insights to make more successful investment decisions. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
MGet RatingGet RatingGet Rating
LBGet RatingGet RatingGet Rating
JCPGet RatingGet RatingGet Rating
ASNAGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com

2024 Stock Market Outlook

The time to think about the 2024 stock market is now. Will it be a bull or bear? Where does the S&P 500 (SPY) end the year? And what are the top picks to outperform? Investment veteran Steve Reitmeister does his level best to answer all these questions. Just read on below...

3 Stocks Bringing AI to the Masses

Like it or not, large companies with a combination of cash and massive databases do have an advantage in the new AI world. These three companies are wielding that advantage to get a leg up in the rapidly changing AI landscape. Keep a close eye on how these companies, Meta (META), Alphabet (GOOGL) and Yelp (YELP) continue to take advantage of their respective incumbencies to shape the consumer’s interaction with AI.

With Oil Soaring, My Under $10 Stock of the Week

The number of oil rigs in the U.S. and Canada has decreased by 170 over the past year. International oil suppliers are cutting output. This opens the door to small oil and gas exploration and development companies like Baytex Energy (BTE).

Income Stock of the Week: Manhattan Bridge Capital (LOAN)

In the current high mortgage rate environment, and with financial instability growing in the commercial real estate market, you want to be extra diligent when investing in mortgage lenders. This lender has a sterling track record of providing short term loans to those needing some quick extra cash. And Manhattan Bridge Capital (LOAN) is rewarding investors with a hefty dividend.

Stock Market vs. Bond Rate Relationship Revealed

The stock market is affected by many things like the Fed and the economy. However, there is not enough talk about how the movement of bond rates makes stocks more or less attractive. Like how the S&P 500 (SPY) is having a terrible September as bond rates explode higher. Learn more about this dynamic relationship and what it means for stock prices in the days ahead.

Read More Stories

More Macy's Inc (M) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All M News