There are winners and losers in most things, be it a baseball game, a political campaign or the stock market. As some stocks go up, others go down. Identifying which stocks to sell and knowing when to pull the trigger is a key factor to being a successful investor.
And while it’s difficult to give up on a stock (particularly if it’s done well for you in the past), sometimes cutting the cord is the best thing. Remember, the reason you’re investing in the first place is to make money. Selling an underperforming stock can help you reduce your losses and preserve your capital for better, more profitable opportunities.
If you have money tied up in bad stocks, it’s always a good idea to reallocate that money into investments with a better growth window and rebalance your portfolio. It’s also an opportunity to ensure that your portfolio has adequate diversification among many sectors, and better aligns with your investment goals.
I’ve used the Portfolio Grader to identify some stocks to sell now. Some names on this list have been high-flying performers in the past. Some are still good companies. But the headwinds that they’re facing at the moment make them a poor investment choice, and there’s little chance of that turning around soon.
Using the Portfolio Grader to identify stocks with poor earnings performance, weak analyst sentiment, a lack of growth and poor momentum, you can avoid losses and keep your portfolio in the black.
And by doing so, you have a better chance of hitting your long-term financial goals.
Pfizer (PFE)
Drugmaker Pfizer (NYSE:PFE) is undoubtedly a company. It has a long track record of success, including making Viagra for erectile dysfunction, Lipitor to treat high cholesterol, the antidepressant Zoloft and the anti-anxiety drug Xanax.
And you can’t forget that Pfizer was a winner in the race to create the first Covid-19 vaccines that helped end social distancing and reopen the economy. Pfizer should (and does) get a lot of credit for that.
But you can’t make an emotional decision about stocks. Pfizer’s past success means it has some rough comparable numbers every quarter when it reports earnings. People aren’t getting Covid-19 vaccinations with the same frequency as they were a year ago, and that fact shows up in Pfizer’s bottom line.
Earnings in the fourth quarter were $14.2 billion, but that’s down 41% from last year. Pfizer also recorded income of $593 million and 10 cents per share, but that looks weak compared to $6.5 billion and $1.14 per share last year.
This is one of the stocks to sell that will be back one day, but it doesn’t make sense to hold it while you wait. It’s down 32% in the last year and gets an “F” rating in the Portfolio Grader.
Lucid Group (LCID)
I know that I said some stocks on this list represent good companies, but that courtesy really can’t be extended to Lucid Group (NASDAQ:LCID). The electric vehicle company has never achieved the potential that bulls had for it when it launched.
Vehicle deliveries in the fourth quarter of 2023 were down 10% from the previous year, reaching 1,734. Lucid manufactured 2,391 vehicles in the quarter, which was down 32% from the previous year.
For the entire year, Lucid delivered only 6,001 vehicles. Lucid reportedly lowered the prices of its EVs three times in just seven months to sell its vehicles, but overwhelmingly, the market is just not interested.
It makes me wonder why the CEO got a $6 million bonus for this kind of performance. LCID stock is down 63% in the last year, making it one of the stocks to sell while you can and earning an “F” rating in the Portfolio Grader.
Occidental Petroleum (OXY)
When oil prices are high, that’s when you want to invest in oil companies. As recently as May 2022, the price of oil topped $120 per barrel, and oil companies were raking in profits.
But today oil is down to $75 per barrel, which is still pricey but not compared to where we were just a couple of years ago. That difference is seen in stocks such as Occidental Petroleum (NYSE:OXY)
Occidental recorded revenue of $7.5 billion in the fourth quarter of 2023, down from $8.3 billion in the same period a year ago. For the full year, OXY had revenue of $28.9 billion, down from $37.1 billion in 2022. Earnings per share for the fourth quarter were $1.08, down from $1.74 in Q4 2022.
Occidental also carries a lot of debt, $18.5 billion thanks to its 2019 purchase of Anadarko Petroleum. It’s adding to that debt with its $12 billion bid in December for CrownRock. By comparison, the company has a market cap of $53.2 billion. So its balance sheet is worth watching.
OXY stock bounces around a lot, and currently, it’s up 2% from a year ago. It gets a “D” rating in the Portfolio Grader.
ChargePoint Holdings (CHPT)
As EV companies like Lucid gained popularity, investors sought alternative ways to benefit from the EV industry. They invested in infrastructure, including companies deploying nationwide charging stations for cars.
But for ChargePoint Holdings (NYSE:CHPT), it’s turned out to be a bad bet. Its losses in the third quarter of fiscal 2024 grew to $158.2 million from $84.5 million in the same period last year. Revenue fell by 12% and net income dropped by 87% from a year ago.
ChargePoint scheduled its fourth quarter 2024 earnings report in early March and I’m not expecting enough improvement to cause me to change my mind about CHPT stock.
ChargePoint is down 82% in the last year and earns an “F” rating in the Portfolio Grader.
Exxon Mobil (XOM)
Exxon Mobil (NYSE:XOM) is the largest U.S.-based oil company, and ranks in the top 20 in the world by market cap, coming in at $416 billion. Like Occidental, it was one of the best stocks you could own when oil prices were in their heyday. And like Occidental, it’s a stock to sell now as oil prices are depressed.
Exxon brought in a hefty $84.3 billion in revenue in the fourth quarter of 2023, which was still down from $95.4 billion a year ago. Exxon’s revenue of $344.5 billion for the full year was down from $413.6 billion in 2022.
Income of $7.6 billion and $1.91 per share was down from $12.7 billion and $3.09 per share for the fourth quarter.
Exxon is investing heavily in carbon capture efforts and lithium production to power EVs. But it’s still an oil company and it will struggle for the near future as long as oil prices remain low.
XOM stock is down 5% in the last 12 months and gets a “D” rating in the Portfolio Grader.
3M Company (MMM)
3M Company (NYSE:MMM) manufactures an assortment of products, including protective equipment, medical supplies and home products.
It’s also spinning off its healthcare unit into a standalone business to be called Solventum. That transaction is expected to be completed on April 1.
The healthcare unit had $8.2 billion of 3M’s business last year (roughly 25%) and I’m not sold on the idea of losing that business if I’m a MMM shareholder.
3M’s bottom line is also affected by a $10.3 settlement reached last summer, accusing it of contaminating public water supplies. And it’s unknown if MMM will face further sanctions.
Revenue in the fourth quarter of 2023 was $8 billion, down 0.8% from a year ago, which, on top of the divestment, makes it one of the stocks to sell now.
MMM stock is down 15% in the last year and gets a “D” rating in the Portfolio Grader.
Peloton Interactive (PTON)
Peloton Interactive (NASDAQ:PTON) is a New York-based exercise equipment company. It makes bikes, treadmills and other exercise equipment. It’s also one of the stocks to sell while you can.
The company’s products are connected to the internet so users can take part in live and on-demand fitness classes via a subscription service, thereby providing the convenience of working out at home with personal training and some social interaction.
Shares, however, are at all-time lows of less than $4.30 each after the company’s most recent earnings report. Peloton brought in $743.6 million in revenue, down 6% from a year ago. The company also posted a loss of 54 cents per share, which improved from losing 98 cents per share a year ago.
In addition, Peloton said it expected the fiscal third quarter to see revenue between $700 million and $725 million, while analysts expected $754 million. The company says it will likely have an adjusted EBITDA loss of $20 million to $30 million for the quarter, while analysts expect it to lose only $2 million.
PTON stock is down 67% in the last year and gets an “F” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in XOM. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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