11 Mega Cap Blue Chip Stocks to Sell

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The stock market has been mighty perky in recent months, up 6% so far in 2011 and up almost 20% in the last six months. The major indexes are going strong and a broad-based rally appears to be lifting not just specific sectors but blue chips across the board. But that doesn’t mean there aren’t plenty of stocks to sell before they flop.

But investors can’t get complacent. Some of the biggest names on Wall Street are still screaming sells despite this relatively new bull market trend. Some stocks have proven this by lagging the market considerably during the rally, others have shown their true colors with poor earnings and some are just plain old dogs with fleas that are mismanaged and rely on poor business models.

To keep you in the best stocks for this rally, here are 11 mega-cap duds to sell now:

Bank of America: Financial powerhouse Bank of America (NYSE: BAC) may be sitting on double-digit gains over the last few weeks, but shares are off -25% since last April and nearly -60% since late 2008. Bad mortgages continue to weigh on this stock so avoid it for now.

Berkshire Hathaway: Warren Buffet’s Berkshire Hathaway Inc. (NYSE: BRK.B) has had a decent stock performance in the past year, but its earnings numbers should cause concern. A quarterly earnings growth of -8%, year-over-year has no stockholder excited. Buffett prides himself on buying good companies at fair prices, but now may be the time for growth — not bargain hunting — as the economy gears up once more.

BP: If the oil spill wasn’t enough to turn you off from buying BP plc (NYSE: BP) its -14% drop in the last 12 months should. Analysts are projecting an earnings drop of 13 cents this quarter as well. Crude oil may be on the rise, but investors have better energy stocks to invest in.

Cisco Systems: Communications and IT giant Cisco Systems Inc. (NASDAQ: CSCO) has had the worst 12 months of any stock on this list, down -21%. When things started to pick up at the end of January, CSCO dropped -15% again. The numbers say it all.

Google: It may be your go-to search engine, but Google Inc. (NASDAQ: GOOG) should not be your go-to stock to buy. In the last month the broader markets have posted modest gains while Google has barely treaded water. The company is sitting on piles of cash and toying with the buyout of everything from Twitter to Groupon. But when you look at the actual earnings, GOOG doesn’t really impress me in the short term.

Hewlett-Packard: Another software industry staple Hewlett-Packard Company (NYSE: HPQ) should also be avoided, having dropped -12% since April. And unlike other lagging blue chips that at least pay back shareholders, a dividend yield of less than 1% isn’t comforting anyone either

Intel: Since reaching a peak in April, Intel Corp. (NASDAQ: INTC) has dropped -11%, compared to large gains by the broader markets. The tech giant looked like it might turn it around, but the stock has gained just +1% in the last three months.

Johnson & Johnson: Losses of -3% in 12 months and -6% since November make Johnson & Johnson (NYSE: JNJ) a stock to sell at the moment. Down earnings numbers aren’t helping JNJ’s cause either. As drug patent expiration and generic competition reshapes the drug marketplace, JNJ is risking being left behind.

Merck & Co: Last but not least is global health care company Merck & Co. (NYSE: MRK) which is down -11% in the last year. A stock loss of -9% year-to-date and a net profit margin of -4% only add to MRK’s woes.

Microsoft: Software giant Microsoft Corp. (NASDAQ: MSFT) may have posted a small gain in the last three months, but Bill Gates’s company is down -4% over 12 months and -5% since mid January. The tech giant may have a virtual monopoly on office software, but it lacks the growth and consumer appeal of companies like Apple (NASDAQ: AAPL) that are connecting with both gadget geeks and 21st century businesses.

Procter & Gamble: Packaged goods and personal products behemoth Procter & Gamble (NYSE: PG) was showing strong growth until mid-January, and the stock is now down -4% in that time. Quarterly earnings growth of -29%, year-over-year is also troubling, and a sign of rough times ahead for stockholders.

As of this writing, Louis Navellier did not own a position in any of the stocks named here.


Article printed from InvestorPlace Media, https://investorplace.com/2011/02/blue-chip-stocks-to-sell-bac-msft-brk-goog-pg-jnj-bp-hpq-csco-mrk/.

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