In this piece, we will take a look at 20 stocks that Wall Street analysts expect to dive the most. If you want to skip our analysis of the stock market and want to jump to the top five stocks in this list, then take a look at 5 Stocks Wall Street Analysts Expect to Dive The Most.
July has been a cracker of a month for the stock market. Investors entered the year with bated breaths, as talk of a recession in the U.S. reached a feverish pitch. However, the boom in artificial intelligence pushed markets to record highs. This rally was smack in the face of a bearish sentiment that had worried that the uptick in the market that had started in September last year was actually a bear trap.
From the onset of the second quarter of 2023, the picture around the stock market started to gradually change. The first major shift in sentiment that hinted that perhaps there really is light at the end of the tunnel came in June in the form of the May jobs report for America released by the Labor Department. This report showed that while the number of jobs open for hiring grew in May, at the same time the unemployment rate also ticked up. The data was followed by the unemployment claims report for the week ending on June 3rd, 2023. This data set, which indicates the number of people that are filing for claims, ended up beating analyst estimates, as it sat at a multi-month high.
After the jobs report, the second crucial data set was the inflation data for May. This revealed that the Federal Reserve's attempt to curtail inflation through high interest rates might have finally started to make its way through the economy since prices only grew by 0.1% in May as compared to the 0.4% in April. The bit about cooling inflation was also mirrored in the Price Index of the June index of the ISM’s Purchasing Manager’s Index (PMI). This particular metric measures the price pressures that manufacturers are facing, and it showed that the price index had slowed by 2.4% to sit at 41.8%.
Enter July. Just as the July Fourth holiday ended, a treasure trove of data was dumped on investors to plug in their crystal ball and try to see where the economy is heading. Initially, investors were spooked beyond belief when a private payroll report more than doubled the projections of jobs added. They were quick to react, and major stock indexes dropped in a flash as everyone wanted to pre-empt a potential increase in the Fed interest rate hiking cycle. Things were made even more nerve-wracking when the unemployment claims report for the week ending on July 1st saw the claims jump to 248,000 and beat the estimates by a comfortable 3,000.
The tussle between the bulls and the bears climaxed with the highly anticipated jobs report for June. This came at a time when everyone was ready to hit the sell button just in case the private payrolls report foreshadowed the Labor Department's job data. This data saw the labor market add 209,000 jobs in June, a sizeable drop. This figure was also below the six month average of 278,000 and it also saw hourly wages growing by 0.4% in June over May.
Finally, markets were presented with the data set that they were waiting for in the second week of July. This data was the inflation report for June which showed that on a monthly basis, the prices had increased by 0.2% and by 3% on an annual basis. This was below Dow Jones estimates of a 3.1% annual jump and a 0.3% monthly jump. Naturally, markets rose, futures jumped, and treasury yields fell as investors began to bet that only one more interest rate hike was left in the cycle as opposed to two that were initially feared.
So, with some really cautious optimism in the market, one interesting way to play the trend is by looking at stocks that are expected to drop in value. Mostly, this is done through short selling, or by buying Put options that value the per share price of a company lower than it might be trading on the market. Some stocks Wall Street analysts believe will dive include Carvana Co. (NYSE:CVNA), Upstart Holdings, Inc. (NASDAQ:UPST), and World Acceptance Corporation (NASDAQ:WRLD).
Stocks Wall Street Analysts Expect to Dive The Most
To compile our list of stocks that Wall Street analysts expect to drop, we first started by compiling a list of stocks that had an analyst share price with a downside over 30% of the current share price. Then, their average share prices and the latest closing prices were listed down and the downside was manually calculated to ensure there were no discrepancies. Out of the initial list of 30 stocks, the top 20 stocks (in terms of downside potential) that Wall Street analysts expect to dive are listed below.
Stocks Wall Street Analysts Expect to Dive The Most
Riot Platforms, Inc. (NASDAQ:RIOT) is primarily a Bitcoin mining company that also sells electrical products and provides equipment space to other mining companies. Eight analysts currently cover the stock, and in a strange twist, the average rating is a Strong Buy but the share price has a 34% downside.
After sifting through 943 hedge funds for their first quarter of 2023 shareholdings, Insider Monkey discovered that 17 had invested in the firm. Out of these, Riot Platforms, Inc. (NASDAQ:RIOT)'s largest shareholder is Paul Marshall and Ian Wace's Marshall Wace LLP with a $20 million stake.
Alongside Upstart Holdings, Inc. (NASDAQ:UPST), Carvana Co. (NYSE:CVNA), and World Acceptance Corporation (NASDAQ:WRLD), Riot Platforms, Inc. (NASDAQ:RIOT) is another stock that Wall Street analysts say will drop.
Bakkt Holdings, Inc. (NYSE:BKKT) is a software company that provides a platform to store and manage cryptocurrencies. The firm's shares are rated Hold on average and the average share price target is $1.24.
Seven of the 943 hedge funds part of Insider Monkey's database had held a stake in Bakkt Holdings, Inc. (NYSE:BKKT) as of March 2023.
Diversified Healthcare Trust (NASDAQ:DHC) is a real estate investment trust with multi billion dollars worth of healthcare properties all over America. Its shares are rated Hold on average, and the firm has missed analyst EPS estimates for three out of four of its latest quarters.
By the end of this year's first quarter, out of the 943 hedge funds part of Insider Monkey's database, 23 had bought and owned Diversified Healthcare Trust (NASDAQ:DHC)'s shares.
Corporación América Airports S.A. (NYSE:CAAP), as the name suggests, is an airport operating company. It manages properties all over the world. In April, May, and June, most analysts covering the shares had rated them as Hold. However, the trend shifted in July, with three out of four rating them as a Strong Buy. There's a single share price target of $8, quite lower than the current price of $14.20.
As of March 2023, five of the 943 hedge funds profiled by Insider Monkey's database had invested in the firm. Corporación América Airports S.A. (NYSE:CAAP)'s largest hedge fund investor is D. E. Shaw's D E Shaw with an investment worth $1 million.
Opendoor Technologies Inc. (NASDAQ:OPEN) is a technology company that offers a platform that connects real estate buyers with sellers. Its shares are rated a low Buy on average, and the average share price target is $3 which comes courtesy of 10 analysts.
After digging through 943 hedge funds for their Q1 2023 shareholdings, Insider Monkey discovered that 32 had held Opendoor Technologies Inc. (NASDAQ:OPEN)'s shares. Daniel Patrick Gibson's Sylebra Capital Management is the firm's biggest investor out of these, courtesy of a $59 million stake.
GoHealth, Inc. (NASDAQ:GOCO) operates a platform that uses technology to connect people with the right health insurance plans. Analyst ratings on the stock have shifted to Hold over May and June, and the average share price target of $11.5 is quite lower than the current price of $18.66.
Insider Monkey's first quarter of 2023 survey covering 943 hedge funds revealed that six had bought a stake in GoHealth, Inc. (NASDAQ:GOCO). Out of these, the largest shareholder is Mark T. Gallogly's Centerbridge Partners through a $68 million investment.
Carvana Co. (NYSE:CVNA), Upstart Holdings, Inc. (NASDAQ:UPST), GoHealth, Inc. (NASDAQ:GOCO), and World Acceptance Corporation (NASDAQ:WRLD) are some stocks with a significant downside according to Wall Street analysts.
Palantir Technologies Inc. (NYSE:PLTR) is a software company that serves the needs of the national security establishment. The firm's stock is up by a whopping 161% year to date. However, analysts have penned in a 40% downside.
31 out of the 943 hedge funds part of Insider Monkey's database had invested in the firm during 2023's first quarter. Jim Simons' Renaissance Technologies is the biggest hedge fund investor, owning a stake worth $343 million.
Beyond Meat, Inc. (NASDAQ:BYND) is a meat company that should be a favorite of environmentalists since it sells plant based products. The shares are up 42% on the market this year, and interestingly, the downside based on the average target share price is also 42%
Insider Monkey profiled 943 hedge funds for their March quarter of 2023 shareholdings to find out that 15 had bought Beyond Meat, Inc. (NASDAQ:BYND)'s shares. Out of these, Philippe Laffont's Coatue Management owns the largest stake which is worth $7.9 million.
Marcus & Millichap, Inc. (NYSE:MMI) is a real estate company that facilitates buyers and sellers with their transactions. The firm's first quarter of 2023 earnings saw its revenue drop by a massive 51.5% annually.
Ten of the 943 hedge funds part of Insider Monkey's database had invested in Marcus & Millichap, Inc. (NYSE:MMI) during this year's first quarter. Chuck Royce's Royce & Associates owns the largest stake among these, through its $64 million investment.
Offerpad Solutions Inc. (NYSE:OPAD) is a real estate firm that engages in the used home buying and selling in America. Average analyst sentiment for the shares lingers on the edge of Hold but is a Buy. The company's first quarter results demonstrated a slowdown in the housing market, with homes acquired and sold both dropping annually.
As of Q1 2023, 15 of the 943 hedge funds profiled by Insider Monkey had bought the firm's shares. Offerpad Solutions Inc. (NYSE:OPAD)'s largest shareholder is Joshua Nash's Ulysses Management through a stake worth $6.1 million.
Offerpad Solutions Inc. (NYSE:OPAD) joins Upstart Holdings, Inc. (NASDAQ:UPST), Carvana Co. (NYSE:CVNA), and World Acceptance Corporation (NASDAQ:WRLD) in our list of stocks that Wall Street analysts say will drop.
QuantumScape Corporation (NYSE:QS) is a battery company that is on the quest to make highly powerful solid state batteries. The firm has missed analyst EPS estimates for all of its previous four quarters. The only analyst that covered the stock in July rated it as Sell.
Despite this, 15 of the 943 hedge funds part of Insider Monkey's March 2023 database had still invested in the firm, although the figure did drop from 21 in the previous quarter. Among these, QuantumScape Corporation (NYSE:QS)'s largest shareholder is Philippe Laffont's Coatue Management through its $11.5 million investment.
The original meme stock, GameStop Corp. (NYSE:GME) is the embattled video game retailer that has struggled for years to turn around its operations. It's a rare stock on our list which is rated as Under Perform, with a sizeable downside of $10 or 44%.
During 2023's March quarter, 15 of the 943 hedge funds part of Insider Monkey's database had bought and owned GameStop Corp. (NYSE:GME)'s shares. Philippe Laffont's Coatue Management is the largest investor through a $28 million stake.
Grupo Supervielle S.A. (NYSE:SUPV) is an Argentinian regional bank with operations focused on its home country. Its shares are also rated Under Perform on average, with four consecutive downgrades.
After sifting through 943 hedge funds for their Q1 2023 shareholdings, Insider Monkey discovered that six had held a stake in Grupo Supervielle S.A. (NYSE:SUPV). Out of these, the largest shareholder is Jim Simons' Renaissance Technologies with an investment worth $864,000 and one which jumped by 839% in Q1. To make matters even more interesting, Simons was joined by D. E. Shaw in upping the stakes in the company, so we wonder what's cooking.
Cricut, Inc. (NASDAQ:CRCT) sells different machines that enable companies to produce customized products such as birthday cards and mugs. An interesting point to note about the stock is that its call options have been quite volatile lately - indicating that there's an undercurrent of unknown sentiment.
Four of the 943 hedge funds part of Insider Monkey's database had invested in Cricut, Inc. (NASDAQ:CRCT) by the end of 2023's first quarter. Out of these, Colin Moran's Abdiel Capital Advisors is the largest investor since it has invested $151 million in the firm.
AMC Entertainment Holdings, Inc. (NYSE:AMC) operates movie theaters all over America. The firm's shares are rated Under Perform on average, but despite this, they have jumped by nearly 13% this year.
By the end of this year's first quarter, 17 of the 943 hedge funds part of Insider Monkey's database had bought the meme stock's shares. AMC Entertainment Holdings, Inc. (NYSE:AMC)'s largest investor in our database is Philippe Laffont's Coatue Management with a sizeable $21 million investment.
AMC Entertainment Holdings, Inc. (NYSE:AMC) joins World Acceptance Corporation (NASDAQ:WRLD), Carvana Co. (NYSE:CVNA), and Upstart Holdings, Inc. (NASDAQ:UPST) in our list of stocks Wall Street analysts expect will dive the most.
