Seven ‘sinful’ stocks to avoid
2 Aug 17
With the FTSE 100 on an almost continual rise, which are the ‘red flag’ stocks that investors should watch out for? Investment bank Liberum lists the seven ‘sinful’ stocks in the top 100 they would “prudently seek to avoid”.
Out of the 14 so-called ‘red flag’ areas the Liberum analysts examined for its fourth annual Sinners note, Vodafone failed in six.
The mobile phone firm was called out for risk in the accuracy of its revenue recognition and stretched cash dividend cover as well as its considerable use of exceptionals, the difference between a company’s reported net income and its adjusted net income.
Liberum said: “Vodafone posted a second year of considerable exceptionals but we note no underlying trend looks to be present.
“Last year saw revaluation of investments in Luxembourg primarily account for the exceptional while in 2017 discontinued operations were responsible for over £3bn of exceptional losses.”
Tags: Investment Strategy
