Sometimes it’s best to sell a stock when you believe you’ve gotten the most out of it that you can — and when you believe there is money to be made in other stocks.
This month I’m advising subscribers to my Emerging Growth investing service to sell six stocks from the Buy List. This is a significant shift in strategy, but I believe that this change will be a powerful one in order to profit in the coming weeks and months. So without further ado, here are this month’s sell recommendations:
3D Systems Corporation
3D Systems (NYSE:DDD) was a way to play the improvement in the manufacturing sector. The company makes 3D modelers and prototype-development tools that help companies create high-quality models of future products. And this stock has been on a tear — up nearly 70% so far this year! If you own DDD, exit your position.
- Also from Louis Navellier: 5 Emerging Growth Stocks to Buy
Allied Nevada Gold Corporation
Allied Nevada Gold (NYSEAMEX:ANV) was a play on rising gold prices as the Fed and other central banks weakened their underlying currencies through quantitative easing — a kinder term for “printing money.” I’m definitely not a gold bug, but this position was a good hedge for our Emerging Growth Buy List. Looking forward, I see more upside in our other positions, so sell this gold miner.
IPG Photonics Corporation
IPG Photonics (NASDAQ:IPGP) is the world’s leading provider of high-power fiber lasers — the next generation of laser technology, which are more energy efficient, easier to maintain and they last longer. It’s no surprise that equipment manufacturers and car makers can’t get enough of these laser — sales of the company’s largest product line boomed 62% in the fourth quarter. Total sales climbed 22% and profits advanced 15% to $31.1 million, or 64 cents per share, a slight miss from the 65 cents per share consensus earnings estimate. The company’s shares are up more than 50% year-to-date, but momentum is starting to slow. Take this opportunity to sell shares of IPGP now.
LSB Industries, Inc.
LSB Industries (NYSE:LXU) is a producer of nitrate and ammonia fertilizers, and its results are closely tied to crop prices. The company last month announced record operating results for the fourth quarter — sales jumped 25% year-over-year to $215.4 million, a 10% beat to analyst forecasts. Over the same period, net income jumped 56% to $28 million, or $1.19 per share. This trumped the 86 cents per share consensus earnings estimate by 38%. These were strong results, and shares popped 8% the following day. Since then, however, the stock hasn’t been able to keep up that kind of momentum. I recommend selling LXU today.
Majesco Entertainment Company
Majesco Entertainment Company (NASDAQ:COOL) develops games for Sony’s (NYSE:SNE) PlayStation, Microsoft’s (NASDAQ:MSFT) Xbox and Nintendo’s Wii game systems, as well as games for personal computers. The company reported so-so earnings in mid-March — net sales climbed 37% to $66.2 million, topping the consensus sales estimate by 21%. However, on an adjusted basis, net income dipped 3% to $7.3 million, or 18 cents per share. Analysts forecast adjusted earnings of 20 cents per share, so the company posted a 10% earnings miss. Since the company’s disappointing earnings, shares have continued to trend lower. Exit your position in Majesco immediately if you hold shares.
Tesoro (NYSE:TSO) is an independent oil refiner and marketer. When we initially got into this stock, the company was benefiting from a glut of crude oil at its massive storage facility in Cushing, Okla. The stock has been a bit of a volatile ride — with plenty of dips and rallies to make sure that you had a chance to get in at a good price. Shares hit a new 52-week high in March, and although the stock has pulled back slightly from that point, I recommend using this recent strength to sell TSO shares.
I also want to put three stocks on our watch list — Titan International (NYSE:TWI), Twin Disc (NASDAQ:TWIN) and Valeant Pharmaceuticals (NYSE:VRX). I don’t want to cut these stocks loose quite yet, since I think we still have a bit more juice left, especially considering their expected strong earnings results in the coming quarter. So expect to sell these stocks after or around their earnings announcements.