Reduce Holdings of These 2 Stocks

They have underperformed the market

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Mednax Inc/ (MD, Financial) and Loma Negra Compania Industrial Argentina Sociedad Anonima (LOMA, Financial) have disappointed their shareholders, underperforming the market by large margins over the past several years and never paying any dividends.

Moreover, analysts on Wall Street have issued moderate sell recommendation ratings for these stocks.

Mednax

Shares of Mednax have tumbled 21% so far this year, 35.4% over the last 52 weeks and 60.5% over the last five years through Friday. The company has underperformed the S&P 500 by 45.4%, 48% and 117%.

Mednax does not pay a dividend.

The Sunrise, Florida-based provider of pediatric subspecialty physician services closed at $26.12 per share on Friday for a market capitalization of $2.2 billion.

The stock has a price-book ratio of 1.49 versus the industry median of 2.58 and a price-sales ratio of 0.6 compared to the industry median of 1.66. Shares do not look expensive, but only because the stock has depreciated substantially over the past several years. The stock is, however, still far from oversold levels.

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Mednax has an average target price of $23.60, which reflects 9.6% downside from Friday’s closing price. Analysts have also issued a moderate sell recommendation rating.

GuruFocus assigned a moderate 4 out of 10 rating for the company's financial strength, but a very high rating of 9 out of 10 for its profitability.

Loma Negra Compania Industrial Argentina

Shares of Loma Negra Compania Industrial Argentina Sociedad Anonima have fallen 41% year to date, 38% over the past year and 69.3% over the past five years through Friday. They have underperformed the S&P 500 Index by 65%, 50.6% and 71.5%.

It does not pay a dividend.

Shares of the Buenos Aires-based manufacturer and marketer of building materials in Argentina and Paraguay closed at $6.56 on Friday for a market capitalization of $781.95 million.

The stock has a price-earnings ratio of 17.77 versus the industry median of 15.03 and a price-sales ratio of 2.51 versus the industry median of 0.95. Despite the decline in the share price, the stock is still far from oversold levels.

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The stock has a moderate sell recommendation rating. Analysts issued an average target price of $6, reflecting an 8.5% downside from Friday ’s closing price.

GuruFocus issued a moderate rating of 5.7 out of 10 for the company's financial strength and 5 out of 10 for its profitability.

Disclosure: I have no positions in any securities mentioned.

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