In this volatile market, many investors are having trouble determining which stocks to buy and which stocks to sell. Right now, there are three major events weighing on the U.S. stock market: Libya, Japan and the steady upward march of food and oil prices amid inflation. And, frankly, some giant blue chips just aren’t positioned to avoid the fallout or capitalize on new opportunities.
These dogs include some of the biggest stocks on Wall Street — mega-cap tech stocks like Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG) make the list, as do financial sector leaders Bank of America Corp. (NYSE: BAC), HSBC Holdings (NYSE: HBC) and Wells Fargo & Co. (NYSE: WFC). Household names Procter & Gamble (NYSE: PG) and Johnson & Johnson (NYSE: JNJ) also make the list, alongside Wal-Mart Stores Inc. (NYSE: WMT) and crude oil giant BP PLC (NYSE: BP). Even Warren Buffett’s Berkshire Hathaway (NYSE: BRKB) makes my list of stocks to sell.
Here are the details on 10 mega-cap blue-chip stocks to sell now:
Blue-Chip Stock to Sell – Microsoft (MSFT)
Down 13% in the past 12 months, Microsoft (NASDAQ: MSFT) has had a tough run in 2011 as well, down 9%. Earnings are another sore spot for the computer conglomerate, as it posted a quarterly earnings decline in its last income statement, year-over-year.
Blue-Chip Stock to Sell – Berkshire Hathaway (BRKB)
Since the start of March, Berkshire Hathaway (NYSE: BRKB) has watched the value of its stock drop 3%. Warren Buffet may be regarded as the smartest investor in the business, but owning shares of his company right now may not be the smartest move for your portfolio. Maybe that’s because Buffett is always focused on the long-term, and many investors just don’t have a lot of faith in the near future.
Blue-Chip Stock to Sell – Wal-Mart Stores (WMT)
Mega-retailer Wal-Mart Stores Inc. (NYSE: WMT) has experienced a 10% decline since hitting its 52-week high at the end of January. This week, the Conference Board reported that after hitting a three-month high in February, its Consumer Confidence Index dropped by 11.9% in March to 63.4 points. To be sure, the discount behemoth isn’t going anywhere, but I don’t like the stock in the near term.
Blue-Chip Stock to Sell – Google (GOOG)
Search engine giant Google (NASDAQ: GOOG) has also had an unproductive 2011 so far, as its stock price has slid 2% in the past three months. Since reaching a 52-week high in mid-January, Google stock is down almost 7%. Google doesn’t pay a dividend either, meaning that those pricey shares haven’t paid back squat for investors lately.
Blue-Chip Stock to Sell – HSBC Holdings (HBC)
Since the middle of February, HSBC Holdings (NYSE: HBC) has declined 10%. Looking in the longer term, HBC shares are up just 2% in the last 12 months, compared to gains of 13% for both the Dow Jones and S&P 500. While a decent 4.7% annual dividend yield is still offered in this financial stock, the recent approval of dividend boosts by the Fed means there has to be more than just income investing perks that makes a bank stock stand out. HSBC doesn’t have much else working for it now.
Blue-Chip Stock to Sell – Procter & Gamble (PG)
Consumer packaged goods provider Procter & Gamble (NYSE: PG) has experienced a decline of 4% in the past 12 months, and 5% since the start of 2011. In its last income statement, this blue chip posted dismal quarterly earnings growth of negative 29% year-over-year.
Blue-Chip Stock to Sell – Wells Fargo & Co (WFC)
Since reaching its peak in early February, Wells Fargo & Co. (NYSE: WFC) has dropped 5%. Potential investors may point to WFC’s recent dividend approval by the Federal Reserve, and the fact that WFC is still soundly profitable. But the recent squeezes on earnings caused by financial reform — notably limiting fees retail banks can charge consumers — still weigh on WFC stock.
Blue-Chip Stock to Sell – Bank of America (BAC)
Bank holding company Bank of America Corp. (NYSE: BAC) has had the worst year of any blue chip stock on this list. Over the past calendar year, BAC stock is down 26%, and since mid-January, BAC is down 10%. Bank of America is trading near its 52-week low of $10.91. And unlike Wells Fargo, Bank of America doesn’t even have the prospect of a higher dividend after the Fed vetoed BofA’s hope for a larger payout later this year.
Blue-Chip Stock to Sell – Johnson & Johnson (JNJ)
Holding company Johnson & Johnson (NYSE: JNJ) has had a rough year, down 9% in the past 12 months, and down 4% year-to-date. Earnings wise, analysts are projecting EPS to be 4 cents lower than the EPS posted this quarter last year. While the health care industry has remained very strong during the recent downturn, the bottom line is that generic drug competition is taking a bite out of J&J’s bottom line.
Blue-Chip Stock to Sell – BP PLC (BP)
Rounding out the list is oil company BP PLC (NYSE: BP). Since last summer’s Gulf oil spill, BP stock is down 21%. Things aren’t looking much better for BP lately, as the stock is down more than 7% since the beginning of March. Analysts’ earnings projections are 14 cents lower than the EPS BP posted this quarter last year. Higher crude oil prices are helping, but pass up BP for better energy stocks.
As of this writing, Louis Navellier did not own a position in any of the stocks named here.
