Question

ou know that firm XYZ is very poorly run. On a scale of 1 (worst) to 10 (best), you would give it a score of 3. The market consensus evaluation is that the management score is only 2. Should you buy or sell the stock?

Answer 1

Answer:

You should sell the stock

Explanation:

Both your personal opinion (score of 3 out of 10), and the market consensus (score of 2 out of 10) coincide: the XYZ company does not have good prospects because management is incompetent. Even if the company is still profitable, it will likely stop being so in the near future, therefore, the most advisable thing to do is to sell the stock before it loses more value.