2 Underperforming Holdings to Consider Reducing

Livent and Astronics will likely continue to disappoint

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Alberto Abaterusso
Oct 10, 2019
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As of Oct. 9, shareholders of Livent Corp.(

LTHM, Financial) and Astronics Corp.(ATRO, Financial)have more than one reason to be unhappy with their holdings.

First, these stocks have underperformed the U.S. market over the past several years. Second, these companies are not paying dividends. Third, sell-side analysts on Wall Street issued moderate sell recommendation ratings, indicating they will likely continue to underperform over the next 12 months.

As a result, shareholders may want to consider reducing their positions in these stocks.

Shares of Livent have decreased 5% over the past three months, 53.3% so far this year, 62% over the last 52 weeks and 60.3% over the last five years through Wednesday. They have underperformed the S&P 500 Index by 2.5%, 69.7%, 69% and 65.8%.

The Philadelphia-based global producer of performance lithium compounds for energy storage does not pay a dividend.

Shares of Livent have a moderate sell rating and an average target price of $7.33.

The stock closed at $6.45 per share on Wednesday for a market capitalization of $941.57 million.

The stock has a price-book ratio of 1.78 versus the industry median of 1.43 and a price-sales ratio of 2.12 compared to the industry median of 1.38.

The 14-day relative strength index of 44 indicates the stock is neither oversold nor overbought.

GuruFocus assigned a 6.4 out of 10 rating for the company's financial strength and a 5 out of 10 rating for its profitability.

Shares of Astronics have fallen 25% over the past three months, 5.4% year to date, 10.5% over the past year and increased only 2.4% over the past five years through Wednesday. They have underperformed the Nasdaq by 22.4%, 24.6%, 16.4%, and 87%.

The East Aurora, New York-based designer and manufacturer of products for the aerospace, defense and electronic industries stopped paying dividends more than 25 years ago. On Feb. 24, 1994, shareholders received the last semi-annual dividend of 3 cents per common share.

Analysts issued a moderate sell recommendation rating for shares of Astronics with an average target price of $26.

Astronics closed at $28.8 per share on Wednesday for a market capitalization of $938.92 million.

The stock has a price-book ratio of 2.02 versus the industry median of 2.09 and a price-sales ratio of 1.16 versus the industry median of 1.32.

The 14-day relative strength index of 45 indicates the stock is neither oversold nor overbought.

GuruFocus issued a 6 out of 10 rating for the company's financial strength and an 8 out of 10 rating for its profitability.

Disclosure: I have no positions in any securities mentioned.

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I am a contributor at GuruFocus. I primarily write about how to pick potential value stocks. Gold, silver and precious metals mining industries is also my cup of tea. My articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. I hold a Master\\\'s Degree in Business Administration from Università degli Studi di Bari (Italy), Aldo Moro. I am based in The Netherlands. You can follow me on Twitter at https://twitter.com/AAbaterusso