The market is at the upper end of its recent range. While some believe that a breakout is imminent, it’s equally likely that we could encounter some selling pressure especially given that the market is overbought and sentiment readings are quite bullish.
 
Let’s take a quick look at three recently downgraded stocks that investors should unload or even consider shorting: Blade Air Mobility (BLDE), Hyatt Hotels Corporation (H), and Nio (NIO).
 
Blade Air Mobility (BLDE)
BLDE makes an air mobility platform for the travel industry. In short, BLDE provides affordable air travel alternatives, primarily in the form of helicopters.
Based in New York, BLDE is a POWR Ratings disappointment with an overall F grade. The stock has an F Value component grade along with Ds in the Quality, Growth, and Stability components. Click here to find out how BLDE fares in the rest of the POWR Rating components such as Momentum and Sentiment.
Of the 16 stocks in the Air Freight & Shipping Services segment, BLDE is ranked dead last. You can find out more bout the stocks in this space by clicking here. BLDE has a three-month price return of -10%. The stock’s six-month price return is -0.5%.
Hyatt Hotels Corporation (H)
H is a hospitality business that primarily makes money from renting hotel rooms. H also has resorts and vacation ownership properties in its global portfolio. As of the spring of ’21, H had more than 1,000 properties in its portfolio spanning 68 countries.
H is a POWR Ratings dud with a F overall grade and Ds in the Value, Growth, Quality and Sentiment components. Investors who would like to know how H fares in the Stability and Momentum components can find out by clicking here.
Of the 20 stocks in the Travel – Hotels/Resorts space, H is ranked nearly last, slotting in at 19th. You can find out more about the stocks in this segment by clicking here. H has a three-month price return of -3%. The stock’s 2020 price return was -17%.
The analysts don’t have much faith in H. The average analyst price target for the stock is about 2.4% below its current price. It is also concerning that of the 17 analysts to have issued recommendations on the stock, 16 consider it a Hold and only one considers it a Buy.
Nio (NIO)
NIO, based in Shanghai, China is the leader in the country’s electric vehicle market, commonly shortened to the acronym of EV. Sometimes described as China’s Tesla, NIO has been publicly traded for three years. The company’s value offering is affordable EVs made by a state owned business and contracted through NIO. The carmaker receives a fee from NIO for each vehicle sold. Instead of using a traditional dealership, NIO sells automobiles through its app and on the web.
NIO is a POWR Ratings failure with an F overall grade. The stock has a F Stability component grade along with Ds in the Quality, Sentiment and Value components. Click here to find out how NIO fares in the Momentum and Growth components of the POWR Ratings.
Of the 57 stocks in the Auto & Vehicle Manufacturers segment, NIO is ranked in the bottom 10, slotting in at number 47 overall. You can learn more about this segment by clicking here.
NIO’s year to date price return is -10%. The stock’s six-month price return is -3%. It is also interesting to note the company had a ’19 price return of -36% before its breakout year in 2020. The NIO bulls pushed the price of this stock up too far too quick and it is now returning back to a more appropriate valuation. Furthermore, NIO has a high beta of 2.55, meaning if the market undulates in the months ahead, NIO will fluctuate right along with it.
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NIO shares were trading at $43.58 per share on Tuesday afternoon, down $0.10 (-0.23%). Year-to-date, NIO has declined -10.59%, versus a 13.43% 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. More...
More Resources for the Stocks in this Article
Ticker | POWR Rating | Industry Rank | Rank in Industry |
NIO | Get Rating | Get Rating | Get Rating |
H | Get Rating | Get Rating | Get Rating |
BLDE | Get Rating | Get Rating | Get Rating |