It’s probably high time to look at your portfolio and see which growth stocks to sell. It has been a disappointing year on Wall Street, to say the least. In 2021, the major indices were up anywhere from 19.5% to 26.9%. Not too shabby.
But so far this year, we’ve not had any such luck. The Dow Jones Industrial Average is down 9.3%; the S&P 500 dropped by 13%, and the tech-heavy Nasdaq composite is down 20.5%. All that is despite a decent rally over the last several weeks.
Tools like my Portfolio Grader are designed to give you an extra edge when evaluating which growth stocks to sell, and hopefully, my readers are seeing returns this year that are better than the overall market.
But there’s still plenty of time left in this calendar year. If you’re not careful the gains that you’ve seen so far this year could evaporate if you’re not careful. According to the Portfolio Grader, there are several growth stocks to sell before the fourth quarter begins. Let’s take a look at seven of them.
| CGC | Canopy Growth Corporation | $3.94 |
| CVNA | Carvana | $38.88 |
| SHOP | Shopify | $34.35 |
| GRWG | GrowGeneration | $5.26 |
| AMRN | Amerin | $1.30 |
| SMG | Scotts Miracle-Gro | $74.24 |
| ZM | Zoom Video Communications | $85.02 |
Canopy Growth Corporation (CGC)
Canopy Growth Corporation (NASDAQ:CGC) stock is down 55% so far this year and is now trading in penny stock territory. It’s probably a good name to hold if the U.S. ever makes recreational pot use legal on a federal basis – but that’s not happening any time soon.
There was a solid school of thought that marijuana stocks would finally see a turnaround. With Democrats holding both the White House and majorities in Congress and Covid-19 fears beginning to fade, it seemed ripe that Washington would finally move forward with an effort to legalize recreational use of marijuana.
But it’s not happening. Inflation is at its highest level in decades, and there’s still a real chance that the economy will slip into a recession. Congress is firmly focused on the midterm elections and marijuana legalization is a distant memory making CGC among the prime growth stocks to sell now.
CGC has an “F” rating in the Portfolio Grader.
Carvana (CVNA)
If you’re in the market to sell your car, then maybe you don’t mind the incredibly overheated market for used cars these days. Prices are way up so far this year.
But it’s also hard to sell a car if you don’t have a buyer. And that’s the conundrum that Carvana (NYSE:CVNA) finds itself in these days.
So perhaps it’s not a surprise that Carvana’s losing money – the company recorded a Q2 loss of $321 million and has year-to-date losses of $491 million. Not only that, but the company says it is seeing a lessening demand for its customer loans, which is hitting Carvana squarely in the wallet.
Not only that, but in the second quarter, Carvana missed earnings estimates, posting $3.88 billion in revenue and an EPS loss of $2.35 versus analysts’ expectations of $4.01 billion and an EPS loss of $1.98.
Down 84% so far this year, CVNA is one of the growth stocks to sell as soon as you can. I don’t see it turning around before the fourth quarter begins. It has an “F” rating in the Portfolio Grader.
Shopify (SHOP)
Shopify (NYSE:SHOP) has been a mess, unfortunately, since the Covid-19 shutdowns ended.
The company’s stock jumped 150% from March 2020 (the beginning of the pandemic) through the end of 2020, but it’s down 80% since then.
Even a 10-for-1 stock split hasn’t been enough to rally SHOP stock.
The company’s bottom line is also hurt by its investments in Affirm Holdings (NASDAQ:AFRM), a financial services company that specializes in making direct consumer loans; and to Global-E Online (NASDAQ:GLBE), an e-commerce platform that allows merchants to sell internationally. Both companies have seen their stock fall this year.
Shopify doubled its marketing and R&D costs in 2021, and it announced plans to spend $1 billion on capital expenditures by 2024. As long as the spending continues while revenues are down, SHOP stock will likely deserve its “F” grade in the Portfolio Grader.
GrowGeneration (GRWG)
Technically, GrowGeneration (NASDAQ:GRWG) isn’t a pure marijuana stock, but it’s been a popular way to play cannabis legalization because of the products that it offers.
GrowGeneration sells hydroponics equipment, greenhouses, grow lights and other equipment that is needed to grow plants indoors, but it’s surely priced like a struggling cannabis stock.
GRWG stock is now approaching penny stock territory after falling nearly 62% so far this year. Earnings for the second quarter continued the stock’s downward spiral.
GrowGeneration reported revenue of $71.09 million versus analysts’ expectations of $83.77 million. The company also posted an income loss of 14 cents per share, while analysts were expecting EPS to be a loss of 8 cents per share.
The losses should continue for the third and fourth quarters, making GrowGeneration a name to avoid for Q4. GRWG stock has an “F” rating in the Portfolio Grader.
Amarin Corp. (AMRN)
With twin headquarters in Ireland and the U.S., Amerin (NASDAQ:AMRN) is a biotech company that is best known for its prescription drug Vascepa, which treats cardiovascular disease. However, Vascepa has been on the market for about three decades and the company no longer has patent exclusivity – meaning that it competes against generic products.
Earnings for the second quarter included revenue of $94.4 million – better than analysts’ expectations for $87.6 million. But when you consider that Amarin brought in $154 million in the second quarter a year ago, you can see the company’s got a problem.
Bottom line earnings were also brutal, as the company posted a loss of $35.6 million, or 9 cents per share. In the same quarter a year ago, AMRN recorded a profit of $10.3 billion.
AMRN stock is down 59% so far this year, and with a third generic product entering the market to compete with Vascepa, those losses will continue. Amarin has an “F” rating in the Portfolio Grader and is a growth stock to sell before Q4.
Scotts Miracle-Gro (SMG)
Scotts Miracle-Gro (NYSE:SMG) is another company that’s being hurt but investor bearish sentiment over cannabis stocks. Shares are down 56% on the year, including a 7.5% drop earlier this month when the company reported earnings for its fiscal third quarter.
Revenue of $1.19 billion was less than analysts’ expectations for $1.23 billion. Earnings per share was a surprise, coming in a $1.98 per share versus expectations for $1.72 per share. That was tempered by a 63% year-over-year drop in the company’s hydroponic sales and a 14% drop in overall consumer operations.
The company also issued guidance for the full year that includes revenue between $4.48 billion and $4.53 billion and EPS between $4 and $4.20. Analysts were expecting EPS for the full year of $4.93.
That’s a major red flag that the company’s earnings for the next quarter aren’t expected to be good. SMG stock has an “F” rating in the Portfolio Grader, and this is a good time to sell shares.
Zoom Video Communications (ZM)
Zoom Video Communications (NASDAQ:ZM) was one of the best stocks you could buy in the early days of the Covid-19 pandemic. From March 2020 to October 2020, ZM stock zoomed from $117 to more than $550 per share as both businesses and schools shifted to virtual spaces.
But now Zoom has given up all of those gains and more, falling to around $85 per share and posting disappointing earnings for its fiscal second quarter of 2023.
Revenue of $1.1 billion was less than analysts’ expectations for $1.12 billion, but EPS of $1.05 per share was better than the prediction for 93 cents.
However, Zoom’s guidance Q3 2023 revenue of $1.09 billion to $1.1 billion is a huge concern. This is especially considering that analysts were expecting $1.15 billion in revenue.
The company’s full-year outlook for revenue between $4.385 billion and $4.395 billion is also less than analysts’ revenue estimate of $4.54 billion.
Zoom is blaming the company’s poor results on macroeconomic headwinds. But those don’t appear to be lessening anytime soon, making ZM a questionable investment for Q4. It has an “F” rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.