The month of June has not been kind to investors, marred by massive sell-offs that have knocked the Dow Jones Industrial Average down 5% since May 31. Bargain hunters are chomping at the bit to pick up their favorite expensive stocks while they’re “on sale.” But I don’t want you to get suckered into buying big-name stocks that have not been performing well just because they are a few dollar cheaper. So here is a list of mega-cap names that should be avoided, even at their newly discounted prices:
Stock to Sell #1 – Petrobras Petroleo Brasileiro (PBR)
Thanks to a downturn that started in April, integrated oil and gas company Petrobras Petroleo Brasileiro (NYSE: PBR) has watched its stock drop 11% year-to-date despite very strong gains in the first part of 2011. PBR stock is down 13% in the last 12 months and is trading close to its 52-week low of $31.50.
Stock to Sell #2 – Berkshire Hathaway (BRK.B)
Warren Buffett run holding company Berkshire Hathaway Inc. (NYSE: BRK.B) has had a lackluster couple of months, dropping 13% in the last 90 days and 8% year-to-date. Quarterly earnings growth of -58% last quarter is another reason to sell the “Oracle of Omaha’s” stock.
Stock to Sell #3 – Google (GOOG)
It may be your go-to search engine, but Google (NASDAQ: GOOG) should not be your go-to stock. GOOG is down 15% year-to-date and posted year-over-year quarterly earnings growth of -8% last quarter. With a $167 billion market cap this is one big stock to sell.
Stock to Sell #4 – Wells Fargo & Co. (WFC)
Diversified financial services company Wells Fargo & Co. (NYSE: WFC) has dropped 19% in the last three months despite big gains in the start of 2011. WFC is down 7% in the last 12 months and is trading near its 52-week low of $23.02.
Stock to Sell #5 – Citigroup (C)
With a market cap of $108 billion, diversified financial services holding company Citigroup (NYSE: C) is the next to make the list of stocks to sell. Down 3% in the last 12 months and 25% year-to-date, C is barely holding above its 52-week low of $36.20.
Stock to Sell #6 – Bank of America (BAC)
It may be a household name in the states, but Bank of America (NYSE: BAC) stock should be dropped from your portfolio. BAC is down 26% in 2011 and 31% in the last 12 months. Don’t over look the bank’s stock recent quarterly earnings growth of -36%, year-over-year, either.
Stock to Sell #7 – China Life Insurance Co. (LFC)
Insurance company China Life Insurance Co. (NYSE: LFC) has watched its stock value dwindle 17% year-to-date and 22% since last June. With a market cap of $95 billion, LFC is hovering dangerously close to its 52-week low of $50.