Investors who run a one-year stock screener will find some of the worst stock performers to avoid.
In fintech, PayPal (PYPL) closed near a 52-week low recently. Despite teaming up with Paychex (PAYX) on January 8, investors are not buying PYPL stock. PayPal partnered with Paychex, a human capital management firm, to enable Paychex customers to get early access to their paycheck. This requires the use of PayPal’s Direct Deposit feature.
PYPL stock trades at a premium at a forward price/book of 2.6 times. The low P/E of below 11 times hides this unfavorable valuation.
In the health plan market, UnitedHealth (UNH) is a stock with elevated risks. Shares traded around $100 above their 52-week low, but President Trump’s ongoing attack on the insurance brokers and corporate middlemen adds risks to UNH stock.
Trump wants to lower insurance premiums. It would pressure pharmacy benefit managers, including CVS Health (CVS), Cigna (CI), and Humana (HUM).
In the auto auction sector, beware of Copart (CPRT). Even after CPRT stock traded near 52-week lows, its P/E is still in the mid 20s. Revenue growth is stalling dramatically, increasing by 0.9% Y/Y in the most recent quarter (Q1). The firm has plenty of cash, holding $5.23 billion. That might limit the downside of holding the stock.
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