The Sell Side And The Weighing Machine

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By Carly Forster

More often than not, investors seek financial advice from financial experts before investing in the stock market. But, when should an investor Sell?  Analysts recommend a Buy rating for any given stock 86.5% of the time. With that said, seeing a financial expert with a decent amount of Sell recommendations can easily catch the average investor’s eye as it can provide a more complete picture for the investor.

Weighing Machine’s Past SELL Recommendations

Seeking Alpha blogger, Weighing Machine, is not afraid to issue a Sell rating.  In fact, seven out of his eight most recent ratings were a Sell, including for stocks such as GoPro Inc (NASDAQ:GPRO), Tesla Motors Inc (NASDAQ:TSLA), Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN), and Demandware Inc (NYSE:DWRE). These ratings, among many others, have earned Weighing Machine a 66% success rate in recommending stocks and a +8.0% average return.

On September 11th, Weighing Machine pled his case as to why GoPro is a Sell. He reasoned, “Shorting GoPro is very expensive” and that it has no possible upside. This was the first time the blogger has made a recommendation for GoPro, earning his a 100% success rate in recommending the stock and a 1.5% average return.

Similarly on September 5th, Weighing Machine named Tesla as a ‘massively overvalued stock.’ He noted, “To get a return, investors need Tesla to sell even more cars! Not only must it sell 20x the number of cars it is currently producing but it needs to earn the highest margins in the industry.” Weighing Machine has also only rated Tesla one time, earning a 100% success rate and a +8.4% average return on the stock.

Separately on September 8th, Weighing Machine also named Achillion Pharmaceuticals an ‘overvalued stock’ and recommended to short it immediately. He explained, “I believe shares are an even better short today and I have increased the number of shares shorted. With no revenue, Achillion shares could fall 80+% if the market becomes less excited about the prospect of the company commercializing its R&D into a viable product (or attracting suitor).” This was weighing machine’s first time making a recommendation for Achillon, earning a 100% success rate on the stock with a +13.2% average return.

Weighing Machine also saw Demandware as a short stock that is overvalued. He said, if “stock prices to turn markedly lower, it is likely that cloud computing stocks in general (and Demandware in particular) could see their survival threatened. Were the market to value Demandware at 13x 2016 estimated EBITDA, we could see shares fall more than 50%.” Weighing Machine has rated Demandware one time, earning a 100% success rate and a +6.6% average return on the stock.

However, Weighing Machine was rather fond of ModusLink Global Solutions, Inc. (NASDAQ:MLNK).  On September 7th, he explained, “Moduslink has a significant hidden asset, a deferred tax asset (which has been written off but remains valid) which means that the company will not pay taxes for the foreseeable future (the tax asset will shield over $2 billion of income from taxation!).” He continued, “I believe such a deal (and the prospect for more deals) would reignite investor enthusiasm and expect Moduslink shares will double when this eventually happens, rewarding patient investors.” Weighing Machine has rated Moduslink twice, but with a 0% success rate, earning him a -5.9% average return on the stock.


It is just as important to know when to Sell a stock, as it is to know when to Buy. Would you trust Weighing Machine’s latest recommendation based on his financial advice history?

To see more recommendations from Weighing Machine, visit TipRanks today!

Carly Forster writes about stock market news. She can be reached at [email protected]

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