Top Stocks To Short Today As Markets Retreat Following Monday’s Rally

After a rally on Monday where the markets were solidly in the green, led by a surge in technology stocks, markets were little changed on Tuesday. The declines come as lawmakers have been infighting on the new coronavirus stimulus package, which has been delayed despite the previous stimulus ending at the end of July. Several issues are outstanding, despite both sides agreeing on another $1,200 stimulus check. Deadlocking any deal is the additional unemployment assistance amounts, if any, to be negotiated. The rally yesterday in Microsoft MSFT and Apple AAPL , rising 5.6% and 2.5% respectively, lifted all boats, but it will remain to be seen if the market has become too extended in this deep recessionary environment we find ourselves in. Our deep learning algorithms paired with Artificial Intelligence (“AI”) technology has identified several Top Shorts today if you are looking to hedge out some winners.

Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.

American Airlines Group Inc (AAL)

First on the Top Short list today is American Airlines Group Inc AAL , with AI-based factor scores of C in Technical, F in Growth, F in Momentum Volatility, and F in Quality Value. The company is the world’s largest airline by scheduled revenue passenger miles. The firm’s major hubs are Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington, D.C. After completing a major fleet renewal, the company has the youngest fleet of U.S. legacy carriers. However, with the pandemic crushing air travel, the airline has already struggled this year and will likely have a tough time in the next couple of years. The stock has lost 61.91% in response year-to-date. Revenue was $45768.0M in the last fiscal year, which compares to $42622.0M three years ago. Operating Income was $3889.0M in the last fiscal year versus $5103.0M three years ago. EPS was $3.79 in the last fiscal year much better than $2.61 three years ago. ROE was 85.32% three years ago. Forward 12M Revenue is expected to grow by 25.19%.

Recommended For You

Beyond Meat Inc (BYND)

Next on the Top Short list is a stock in vogue these days in Beyond Meat Inc BYND . The provider of plant-based “meats” shot onto the scene in the last year, but our deep learning algorithms have identified factor scores of F in Technical, C in Growth, F in Momentum Volatility, and D in Quality Value for the stock that has gained 77.58% for the year. The company makes meatless burgers (64% of 2019 sales), sausage (23%), ground beef (13%), and chicken. Unlike other vegetarian products, Beyond Meat seeks to replicate the look, cook, and taste of meat, is targeted to omnivores, and is sold in the meat case. The products are widely available across the U.S. and Canada and in 63 additional countries as well. Revenue grew by 19.09% in the last fiscal year to $297.9M, a growth of 988.87% over the last three fiscal years from $32.58M. Operating Income grew by 207.44% in the last fiscal year to $4.38M, and grew by -162.92% over the last three fiscal years from $(21.4)M. EPS lost -75.83% in the last fiscal year coming in at $(0.29), and shrank by -98.72% over the last three fiscal years from $(5.57). ROE was (5.39%) in the last year compared to (76.43%) three years ago. Forward 12M Revenue is expected to grow by 10.89%.

Grubhub Inc (GRUB)

Third on the Top Short list today is Grubhub Inc GRUB with factor scores of F in Technical, F in Growth, D in Momentum Volatility, and D in Quality Value. The company provides an online takeout food platform for diners and restaurants. The firm generates revenue by charging restaurants a commission based on each order amount. It also charges consumers a delivery fee for orders where the firm handles the delivery. Grubhub has over 50,000 restaurant partners. The stock is up 55.69% this year as the delivery business boomed during lockdown restrictions, a trend that may continue for an extended period. Revenue grew by 13.22% in the last fiscal year to $1312.15M, a growth of 117.49% over the last three fiscal years from $683.07M three years ago. Operating Income was $(0.58)M in the last fiscal year, much worse than the $99.39M three years ago. EPS was $(0.2) in the last fiscal year compared to $1.12 three years ago. ROE was (1.26%) in the last year versus 9.47% three years ago. Forward 12M Revenue is expected to grow by 6.56%.

Hecla Mining Co (HL)

Hecla Mining Co HL makes the Top Short list today with factor scores of D in Technical, C in Growth, F in Momentum Volatility, and F in Quality Value from our deep learning algorithms. The company produces and explores for silver, gold, lead, and zinc. Its main silver mines include Idaho-based Lucky Friday and Greens Creek in Alaska. Hecla acquired 100% of the Greens Creek from Rio Tinto in April 2008, after holding a 29% interest for 20 years. The stock has gained 63.45% for the year amid a surge in precious metal prices. Revenue grew by 13.81% over the last three fiscal years to $673.27M in the last fiscal year, which compares to $577.78M three years ago. Operating Income shrank by -48.68% in the last fiscal year to $(44.0)M which compares to $57.54M three years ago. EPS shrank by -10.19% in the last fiscal year and came in at $(0.2), compared to $(0.07) three years ago. ROE was (5.88%) in the last year versus (1.94%) three years ago. Forward 12M Revenue is expected to grow by 5.84% and the stock is trading with a forward 12M P/E of 58.66.

Urban Outfitters Inc (URBN)

Our final Top Short today is Urban Outfitters Inc URBN with factor scores of C in Technical, F in Growth, F in Momentum Volatility, D in Quality Value. The stock is down 36.72% for the year as it struggles with dealing with a global pandemic. The company is an apparel and home goods retailer that operates more than 600 stores in North America and Europe under the Urban Outfitters, Free People, Anthropologie, Terrain, and Bhldn brands. Revenue grew by 2.54% over the last three fiscal years to $3983.79M in the last fiscal, which compares to $3616.01M three years ago. Operating Income was $260.45M in the last fiscal year versus $271.3M three years ago. EPS was $1.67 in the last fiscal year compared to $0.96 three years ago. ROE was 11.42% in the last year versus 8.28% three years ago. Forward 12M revenue is expected to grow by 7.04%

Liked what you read? Sign up for our free Forbes AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open.

Comments are closed.