2 Underperforming Holdings to Lower
- By Alberto Abaterusso
Shareholders of Telecom Argentina SA (NYSE:TEO) and Xerox Holdings Corporation (NYSE:XRX) have witnessed a significant decline in the value of their holdings over the past couple of years, largely underperforming the S&P 500 Index.
Even so, these companies still have negative recommendation ratings on Wall Street, which indicates that analysts do not expect 2021 to be different in terms of share price performance.
Thus, shareholders of these stocks may want to consider lowering their stakes, in my opinion.
Telecom Argentina SA (NYSE:TEO)
Shares of the Argentinian telecommunication services provider have declined by 43% over the past year, 60% over the past two years and 59% over the past five years through Feb. 5, underperforming the S&P 500 by 60%, 104% and 166%, respectively.
Still, the company has cut the yearly amount that is returned to its shareholders through the payment of dividends by 62.23% to 37.2 cents per common share in 2020, down from a total of 98.5 cents per common share in 2019.
The share price traded at around $6.55 at close on Feb. 5 for a market capitalization of $2.82 billion and a 52-week range of $6.20 to $12.35.
The 14-day relative strength index of 46 indicates the stock is still trading far from oversold levels despite the sharp share price depreciation.
On Wall Street, the stock has an underweight median recommendation rating.
Xerox Holdings Corporation (NYSE:XRX)
Shares of the Norwalk, Connecticut-based designer, developer and seller of document management systems and solutions have decreased by 38% over the past year, 20% over the past two years and by 7% over the past five years through Feb. 5. The stock has underperformed the S&P 500 by 56%, 64% and 114%, respectively, over these time periods.
Currently, the company pays a quarterly cash dividend (25 cents per common share), but this has decreased by 2.8% per annum over the past five years.
The share price was trading at around $23.50 at close on Feb. 5 for a market capitalization of $4.66 billion and a 52-week range of $14.22 to $38.69.
The 14-day relative strength index of 61 indicates the stock is not oversold yet despite the share price tumble.
On Wall Street, the stock has an underweight median recommendation rating.
Disclosure: I have no positions in any securities mentioned in this article.
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This article first appeared on GuruFocus.
