Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Smart Money Stock to Sell for 2018: Twitter Inc (TWTR)

Bearish on Twitter

We are now rolling into the fourth quarter of 2017, and the new year is just around the corner. Now is the time to start preparing your portfolio for 2018, so which struggling stocks is the smart money telling you to avoid?

I set out to pinpoint the worst-performing stock in the market right now. I wanted to find a stock that is set to go one way in 2018: down.

To pinpoint this honey trap, I turned to two of TipRanks most popular tools: the Stock Screener and the Trending Stocks tool. However, this time, I set the filters to find only stocks with a hold or sell consensus. On the trending stocks tool, I looked for the Street’s worst-rated stocks over the last month.

The Result: Twitter

Twitter Inc (NYSE:TWTR) is not a stock you want in your portfolio. In the last two weeks alone, the stock has received three sell ratings from top analysts. At the same time, its abysmal average analyst price target of $15.35 suggests over 12% downside from current prices.

Five-star Aegis Capital analyst Victor Anthony is behind the stock’s most recent sell rating. His bearish $13 price target undercuts the current share price by almost $5. (To watch Anthony’s track record, click here)

Twitter has an “uphill battle” to win over advertisers says Anthony. He has been talking to ad industry execs to get their insights. The conclusion is that TWTR faces “a tough competitive environment for online ad dollars” due to rivals like Amazon and Snap Inc.

“One advertiser noted that Twitter’s management has not quite made the case for shifting meaningful ad dollars to Twitter,” writes Anthony. Add in the fact that user growth is limited and the picture becomes doubly worrying. “Our MAU [monthly average user] tracker points a slight sequential improvement in MAUs in 3Q17, but not enough to suggest a turnaround is imminent” the analyst concludes.

Twitter has just revealed that it is developing a bookmarking feature. This is described by Twitter as a “new way to save tweets to read later.” But from an investor perspective it seems too little too late to make Twitter a worthy portfolio stock.