CITI: Sell These 19 Stocks Because The Rest Of Wall Street Is In Love With Them

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Sometimes going against the herd is a smart way of improving your returns.┬áIn light of that, we ran Citi’s best contrarian buy stocks yesterday.

Now, we’ve drawn on Citi analyst Javier Guardo’s report for the top contrarian sells.

Note: Citi calculated its contrarian views relative to consensus by rankings its Sell-rated stocks against ascending mean consensus scores.

Baxter International is likely to suffer in a more competitive environment

Ticker: BAX

Sector: Medical supplies and technology

Why: IVIG -- blood products used to treat immune deficiencies and acute infections -- comparisons are likely to get more difficult this year in a more competitive environment, especially with Octapharma back on the market. The market for recombinant FVIII (rFVIII) used to treat hemophilia is also getting competitive and Baxter needs to develop that product pipeline.

Analyst: Matthew J. Dodds

Source: Citi

St. Jude Medical's share in pacemakers will decline and wall street is too bullish on its just approved defibrillator

Ticker: STJ

Sector: Medical supplies and technology

Why: St. Jude Medical's share gains in implantable cardioverter-defibrillator (ICDs) has slowed and share losses in pacemakers are expected to continue. Meanwhile, its Riata defibrillator leads have been recalled by the FDA because of their potential to hurt patients, and Wall Street is too bullish on the prospects of Quartet (Quadripolar, Left-ventricular Pacing Lead).

Analyst: Matthew J. Dodds

Source: Citi

VMware's growth is expected to be hurt by headwinds to its core business

Ticker: VMW

Sector: Software

Why: Headwinds in the core server business will see VMWare's growth slow this year. This is expected to have a negative impact on its cash flow.

Analyst: Walter H. Pritchard

Source: Citi

eHealthInsurance's core business looks weak and commission rates are expected to fall

Ticker: EHTH

Sector: Health care services

Why: eHealthInsurance's core business is under pressure, applications continue to miss expectations, and the company's commission rates are expected to fall in 2012.

The company's recent entry into Medicare distribution offers room for growth in the near-term, but individual health insurance commissions are expected to dive in 2014, when the Dept. of Health and Human services' online health exchange goes live.

Analyst: Carl McDonald

Source: Citi

Celestica Inc is expected to miss revenue growth targets because of collateral damage from RIM

Ticker: CLS

Sector: Electronics manufacturing services

Why: Electronics manufacturer Celestica draws a large portion of its revenue from Blackberry maker Research in Motion. Continued problems at RIM are expected to hit Celestica and keep it from meeting its revenue growth target.

Analyst: Jim Suva

Source: Citi

Zimmer Holdings faces a competitive environment for its core product

Ticker: ZMH

Sector: Medical supplies and technology

Why: Zimmer Holdings is exposed to a difficult environment for hip and knee implants which account for 70 per cent of its sales. The valuation is below the peer group average, but the company faces risk of share loss in revision products, and most EPS growth is expected to come from share repurchases.

Analyst: Matthew J. Dodds

Source: Citi

Walgreens is unlikely to resolve its dispute with Express Scripts this year

Ticker: WAG

Sector: Retailing - drugstores

Why: It is unlikely that we will see a resolution between Walgreens and Express Scripts in 2012. Walgreens also has limited negotiating leverage with benefits managers and its direct rates remain higher than employer's current pharmacy benefit manager (PBM) rates.

Analyst: Deborah Weinswig

Source: Citi

Akamai Technologies faces aggressive competition from Amazon

Ticker: AKAM

Sector: Software

Why: Akmai carries too much risk for its current valuation level, it faces greater competition from Amazon, and the stock price response to its Contendo deal was too aggressive.

Analyst: Mark Mahaney

Source: Citi

Abbott Laboratories will be hurt by competition from generic drugs and from a slowdown in Humira's growth

Ticker: ABT

Sector: Medical supplies and technology

Why: Growth of Abbott Labs' Humira, used to treat rheumatoid arthritis, is expected to slow, and generics are expected to hurt the company's lipids franchise over the next 2 years, showing that Wall Street forecasts may be too aggressive. Investor interest is also expected to fade.

Analyst: Matthew J. Dodds

Source: Citi

Masimo Corporation's market share gains will not be enough to meet its revenue outlook

Ticker: MASI

Sector: Medical supplies & technologies

Why: Masimo faces sales and profitability challenges to the pulse oximetry market. Pulse oximetry is a non-invasive method to monitor the oxygenation of hemoglobin.

It seems unlikely that its share gains will help meet its revenue outlook, especially since U.S. hospital admission trends are weak and the change to new technology has been slow.

Analyst: Matthew Dodds

Source: Citi

Urban Outfitters still has structural issues at Anthropologie

Ticker: URBN

Sector: Retailing - softlines

Why: Structural issues at Anthropolgie will likely cause a high level of markdowns.

Analyst: Jeff Black

Source: Citi

AvalonBay Communities Inc's shares are too expensive

Ticker: AVB

Sector: Real estate investment trusts (REIT)

Why: Multifamily fundamentals are strong, but AvalonBay's current stock price is too expensive considering its growth prospects, especially when compared with its peer group.

Analyst: Michael Bilerman

Source: Citi

Ormat Technologies outlook in the near term will be impacted by operational issues

Ticker: ORA

Sector: Alternative / renewable energy - other

Why: Operational issues are expected to hinder Ormat Technologies' near-term outlook. while growth is expected to be limited because of lack of meaningful power capacity additions in the next couple of years.

Analyst: Timothy M. Arcuri

Source: Citi

Best Buy's profits are expected to come under pressure and its international prospects look weak

Ticker: BBY

Sector: Retailing - hardlines

Why: Best Buy's gross profits are under pressure from commoditizing product channel / competitiveness i.e. the interchangeability of products and services between companies.

There are also long term concerns on its international prospects and a lack of short term catalysts to boost sales.

Analyst: Kate McShane

Source: Citi

Tenet Healthcare's low market share is hurting its ability to negotiate commercial payment rates

Ticker: THC

Sector: Health care facilities

Why: Tenet Healthcare operates in competitive large urban markets, but has low average market share which impacts its commercial payment rates. Current industry-low margins and the limited free cashflow generation are unlikely to pick up.

Analyst: Gary Taylor

Source: Citi

Monster Worldwide is losing market share to competitors and is hurt by slow economic recoveries in the developed world

Ticker: MWW

Sector: Internet

Why: Monster's outlook is weak because of slower than expected economic recoveries in the U.S. and EU. It has also lost market share to CareerBuilder in the U.S. and faces increasing competition from Linked In, which is gaining share among recruiters.


Source: Citi

Hospira could take financial blows from FDA consent decrees and has underlying profitability challenges

Ticker: HSP

Sector: Medical supplies & technology

Why: Hospira faces underlying profitability challenges and competition from its peers' capacity improvements for injectable drugs. The company still faces the near- term risk of an FDA consent decree, which could result in financial penalties and could reverse investor sentiment.

Analyst: Gregory Hertz

Source: Citi

Lincare is expected to be hit by competitive bidding

Ticker: LNCR

Sector: Health care facilities

Why: Lincare faces at least a 30 per cent reimbursement cut on the 50 - 60 per cent of its total revenues that fall into the competitive bid categories. Its valuation multiple is unlikely to expand in that event, and could contract if Republicans choose to accelerate the national implementation of Congress mandated competitive bid rates.

Analyst: Gary Taylor

Source: Citi

Yingli Green's assets could lose value because of oversupply

Ticker: YGE

Sector: Alternative / renewable energy - other

Why: Yingli's assets are at risk of being written down because of oversupply.

Analyst: Timothy M. Arcuri

Source: Citi

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