As of Dec. 27, shareholders of Meridian Bioscience Inc. (VIVO, Financial) and TimkenSteel Corporation (TMST, Financial) have more than one reason to worry about their holdings.
These stocks have underperformed the U.S. market heavily over the past several years. Additionally, they have both stopped distributing dividends. These two stocks have also received moderate sell recommendation ratings from Wall Street sell-side analysts, reducing the hope of a rebound.
Thus, shareholders may want to consider reducing their holdings in these companies, or at least reviewing the company's fundamentals and earnings potential.
Meridian Bioscience
Shares of Meridian Bioscience have fallen 42.7% so far this year, 44.4% over the last 52 weeks, 36% over the last two years and 41.8% over the last five years through Friday, underperforming the S&P 500 by 72%, 73.7%, 54.2% and 100.2%, respectively.
The company is a Cincinnati, Ohio-based developer and distributor of test kits to diagnose several infectious diseases and abnormal levels of lead in the blood.
The quarterly dividend was 12.5 cents per common share, but it was paid only once this year on Feb. 14. Due to the company’s decision to allocate its financial resources to the acquisition of other healthcare businesses, Meridian Bioscience announced on April 30 that it would suspend the payment of quarterly cash dividends.
The share price closed at $9.65 on Friday for a market capitalization of $413.28 million.
The stock has a price-earnings ratio of 16.64 versus the industry median of 31.31 and a price-sales ratio of 2.06 compared to the industry median of 3.76.
The stock seems cheap, since the share price has suffered sharp declines. Nevertheless, the stock is not oversold yet, as indicated by a 14-day relative strength index of 53.
Meridian Bioscience has a moderate Wall Street sell recommendation rating with an average target price of $8.50, reflecting a 12.4% downside from Friday’s closing price.
GuruFocus assigned a positive rating of 6 out of 10 for the company's financial strength and a high rating of 8 out of 10 for its profitability.
TimkenSteel Corporation
Shares of TimkenSteel Corporation have fallen 18% year to date, nearly 15% over the past 52 weeks, 55% over the past two years and almost 80% over the past five years through Friday. Over these periods, the stock has underperformed the S&P 500 by 47.1%, 44.1%, 73.3% and 137.2%, respectively.
Based in Canton, Ohio, TimkenSteel Corporation is a global producer and seller of alloy and micro-alloy steel products as well as carbon steel products.
TimkenSteel Corporation stopped paying dividends in 2015.
Shares of TimkenSteel Corporation closed at $7.44 on Friday for a market capitalization of $333.46 million.
The stock has a forward price-earnings ratio of 123.46 versus the industry median of 12.18 and a price-sales ratio of 0.24 versus the industry median of 0.34.
Regardless of the sharp fall in the share price, the stock is still far from oversold levels, according to the 14-day relative strength index of 61.
Sell-side analysts on Wall Street have recommend a moderate sell for shares of TimkenSteel Corporation, setting an average target price of $5.50, which reflects a 25.7% downside from Friday’s closing price.
GuruFocus issued a moderate rating of 5 out of 10 for the company's financial strength and a rating of 4 out of 10 for its profitability.
Disclosure: I have no positions in any securities mentioned.
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