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September 01, 2020 1:41pm
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2 Stocks to Sell Before They Fall Even Further

The stock market is expected to remain under pressure on concerns over the Fed’s future interest rate hikes to tame the elevated inflation. Therefore, investors should avoid fundamentally weak stocks Riot Blockchain (RIOT) and fuboTV Inc. (FUBO) as they are expected to tumble further. Read on…

The stock market has been on a wild ride this year due to the aggressive interest rate hikes to control the high inflation, geopolitical issues, and an economic contraction for two consecutive quarters. Despite the market’s rebound since July, analysts expect it to tumble further as inflation remains high enough for the Fed to maintain its hawkish stance.

Melissa Bouchillon, certified financial planner, and managing partner at Sound View Wealth Advisors, said, “As we look to the second half of the year, I would expect more volatility. We could see a little run-up like we did, but the trend and the trajectory is downward. I don’t think the worst is behind us.”

Apart from the Fed’s hawkish stance, investors are worried about the deepening of the yield curve inversion as it indicates an imminent recession. Speculations about what Fed Chairman Jerome Powell will signal at the Jackson Hole symposium on Friday have primarily contributed to the yield curve inversion.

Amid this backdrop, it could be wise to avoid fundamentally weak stocks Riot Blockchain, Inc. (RIOT) and fuboTV Inc. (FUBO). These stocks have fallen more than 65% year-to-date and could tumble further.

Riot Blockchain, Inc. (RIOT)

RIOT is involved in cryptocurrency mining and the overall blockchain system through various investments. It operates through Bitcoin Mining, Data Center Hosting, and Electrical Products and Engineering segments.

For the fiscal second quarter that ended June 30, 2022, RIOT’s total cost and expenses increased 1,012.1 year-over-year to $438.96 million. The company’s operating loss widened 7,045.9% from the year-ago period to $366.01 million.

Also, its net loss came in at $366.33 million, compared to a net income of $19.34 million in the year-ago period. Its adjusted EBITDA loss came in at $65.17 million compared to an adjusted EBITDA of $2.38 million. In addition, its adjusted loss per share came in at $0.50, compared to an adjusted EPS of $0.03 in the year-ago period.

For the quarter ending September 30, 2022, RIOT’s revenue is expected to decline 1.7% year-over-year to $63.72 million. Its EPS for fiscal 2022 is expected to remain negative. It has failed to surpass the consensus EPS estimates in three of the trailing four quarters. The stock has declined 67.4% year-to-date to close the last trading session at $7.29.

RIOT’s POWR Ratings are consistent with  this bleak outlook. It has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

RIOT also has an F grade for Stability, Sentiment, and Quality and a D for Value. Within the D-rated Technology - Services industry, it is ranked #81 out of 82 stocks. To see the other ratings of RIOT for Growth and Momentum, click here.

fuboTV Inc. (FUBO)

FUBO operates as a live TV streaming platform for sports, news, and entertainment content in the United States and worldwide. Its fuboTV platform permits customers to access content through streaming devices and on SmartTVs, computers, mobile phones, and tablets.

FUBO’s total operating expenses for the fiscal second quarter ended June 30, 2022, increased 57.8% year-over-year to $334.41 million. Its operating loss widened 38.8% from the year-ago value to $112.52 million.

The company’s net loss came in at $116.27 million, widening 22.5% from the year-ago period, while its adjusted EBITDA loss widened 67% year-over-year to $79.10 million. Also, its adjusted loss per share came in at $0.45, up 21.6% from the year-ago period.

Analysts expect FUBO’s EPS to remain negative for fiscal 2022. The stock has lost 74.2% year-to-date to close the last trading session at $4.

FUBO’s weak fundamentals are reflected in its POWR Ratings. It has an overall F rating, equating to a Strong Sell in our proprietary rating system.

It has an F for Stability and Quality and a D for Momentum and Sentiment. It is ranked last out of 16 stocks in the D-rated Entertainment - Sports & Theme Parks industry. Click here to see the other ratings of FUBO for Growth and Value.

RIOT shares were trading at $7.26 per share on Thursday afternoon, down $0.03 (-0.41%). Year-to-date, RIOT has declined -67.49%, versus a -11.87% rise in the benchmark S&P 500 index during the same period.

About the Author: Shweta Kumari

Shweta's profound interest in financial research and quantitative analysis led her to pursue a career as an investment analyst. She uses her knowledge to help retail investors make educated investment decisions.


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