BHR - 4 Downgraded Stocks to Avoid for the Rest of the Year

The latest POWR Ratings have been published. These ratings are calculated daily based on various metrics to identify stocks as a Strong Buy, Buy, Hold, Sell, or Strong Sell.

The POWR Ratings reveal several stocks have been downgraded to "Strong Sell.". If you own any of the stocks recently downgraded to "Sell" or "Strong Sell," it is time to re-evaluate your position.

Let's take a look at four of the more recent POWR Ratings downgrades: Entercom (ETM), Braemar Hotels & Resorts (BHR), Ardmore Shipping Corporation (ASC), and Liquidia Technologies (LQDA).

Entercom (ETM)

Radio advertising has declined as the pandemic has played out. Tune in to your local sports radio station or new radio station, and you will likely hear the same dozen commercials played over and over again. The reduction in advertising revenue has hurt ETM.

Though ETM is the fourth-largest radio broadcasting business in the United States, it is struggling. ETM executives went out of their way to set up radio stations throughout the country, hoping the geographic diversification would mitigate the impact of a potential recession. However, ETM has not fared well during the recession simply because businesses cut advertising before other costs.

ETM has "F" grades in the Trade Grade and Buy & Hold Grade POWR components. The stock has lost 69% year-to-date price return. Furthermore, ETM's three-year price return is -86%.

Though ETM briefly spiked to $2.50 this past June, the stock sold off in the months to follow. ETM will likely remain a penny stock until after the recession ends.

Braemar Hotels & Resorts (BHR)

Real estate investment trusts are usually stable investments. However, when a REIT's money stems from investments in luxury resorts and hotels, and then a pandemic strikes, most investors jump ship. This is exactly what occurred with BHR.

BHR has "F" grades in the Buy & Hold Grade and Trade Grade components. It is ranked 16 out of 18 in the REITs - Hotel industry. BHR has 72% year to date. 

Do not be fooled by BHR's temporary spike up to $5.51 earlier this June. BHR quickly sold right back down to the $2.50 level. It's best to avoid this stock until after the pandemic and recession come to an end. It might be a year or longer until people feel safe traveling, staying in hotels, and spending a considerable amount of money BHR requires for a night at its luxurious resorts.

Ardmore Shipping Corporation (ASC)

The downgrade of ASC makes it clear investor dollars are not flowing to chemical tanker stocks. ASC owns and operates such tankers. The company provides shipping services to clients with time charters, commercial pools, and voyage charters.

Unfortunately, shipping petroleum products, including oil, are ASC's primary business. The oil industry has tanked, bringing ASC along with it.

ASC has "F" grades in the Trade Grade and Buy & Hold Grade components. It is ranked 40th out of 46 stock in the Shipping industry. ASC has lost 63% year to date and 38% over the past six months. 

Liquidia Technologies (LQDA)

This late-stage biopharma business has squared its focus on developing and selling therapeutics with PRINT technology. LQDA products treat pulmonary arterial hypertension and post-surgery pain.

LQDA is ranked in the bottom half of the Medical - Pharmaceuticals industry. LQDA has "F" grades in the Buy & Hold Grade and Trade Grade components.

The stock has 18% year to date and 52% over the last six months. The lack of news about the progression of LQDA therapeutics will continue to plague the stock. 

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ETM shares were trading at $1.53 per share on Friday morning, up $0.06 (+3.74%). Year-to-date, ETM has declined -66.75%, versus a 10.33% 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.

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