Gold Members and higher can access February’s 14 Most Dangerous Stocks as of Thursday, February 3.
We provide 5 large/mid cap names and 9 small cap names to sell/short in this monthly newsletter.
You need a Professional Membership or higher to view all the content on this page.
Already a member?
Learn more about our research here.
2 replies to "Most Dangerous Stocks Model Portfolio: February 2022"
I see that one of the five large/mid cap stocks has an equity rating that was suspended on 2/4. The reason, however, appears to be based upon weak internal controls. I would assume weak internal controls would only make the stock even more dangerous, but I’m not sure how you treat securities with suspended ratings. Can you help us understand how whether you believe the suspended status should change our evaluation of whether the stock remains one of the five most dangerous?
Roger, you are correct. A stock that earns a suspended rating for weak internal controls means the company has an additional risk of misstating its financial statements as well as the inability to identify an error in a timely manner. Stocks with weak internal controls are even more dangerous than those without and are eligible for consideration for our Most Dangerous Stocks Model Portfolio. However, we exclude stocks which have Suspended Ratings for reasons other than weak internal controls from our Model Portfolios. For these stocks, we have no way of reliably modeling the current business until the company gives us updated financials. You can read more about our Suspended Ratings here: https://www.newconstructs.com/analyst-notes-internal/.