When it comes to building a successful investment portfolio, figuring out which stocks to buy is the easy part. The real money is made in knowing when to sell. It’s important strike a good balance between taking profits on high-flying investments and cutting your losses on those that didn’t work out as you planned, but it’s often hard to make a sell decision on a stock that you’ve held on to and finally delivered.
With that in mind, here’s a look at 4 long-term winners that are now stocks to sell.
Long-Term Winning Stocks to Sell: Tesla (TSLA)
If you’ve been on the Tesla Inc. (NASDAQ:TSLA) roller coaster over the past 5 years then you were probably cheering the fact that the stock made it back above $300 per share after a particularly bumpy spring, but the constant headlines have led to an equally bumpy summer. At this point, the company’s uncertain future makes it a long-term winner to sell. Although I’ll admit that CEO Elon Musk’s inventive ideas are worth talking about, I’m not sure I trust him to turn things around at Tesla.
The company has suffered quite a few crippling blows recently — from questions about the safety of it’s batteries to (denied) reports that it asked suppliers to rebate payments to Elon Musk calling a diver who helped save the lives 12 boys a pedophile — and investors should be starting to wonder whether or not Tesla will ever actually turn a profit.
Earlier this summer, Musk announced that in order to focus on generating a profit he would lay off 9% the firm’s workforce — a worrying sign considering that the layoffs won’t affect assembly line staff and so are in no way associated with Tesla’s plans to automate its production line. Not to mention the company has also abandoned Home Depot (NYSE:HD) as a sales partner for its solar panels, opting instead to sell through Tesla itself. As I mentioned in an earlier article, the news suggests that TSLA is giving up on its solar power arm right now, a move that should worry investors considering the company shelled out $2.1 billion on that arm of its business just a few years ago.
Things look chaotic and uncertain at Tesla right now, and I think its a miracle that the stock has actually made money over the past few years. If you’ve held on to your TSLA shares until now, you might want to consider getting out before things really start to fall apart.
Long-Term Winning Stocks to Sell: Twitter (TWTR)
If you’ve stuck it out with Twitter (NYSE:TWTR) over the past few years, it might be tempting to hold on a little longer to wait for the stock to return its 2014 highs of nearly $70 per share. However, TWTR’s rally from less than $20 per share a year ago to $45 per share today is worth taking profits on now before a pullback strikes again.
The trouble for Twitter at this point is that renewed optimism surrounding the platform’s future potential has driven the share price dramatically higher — that means big expectations for the quarterly results due out on July 27. Twitter hasn’t been able to deliver on monthly active user stats, but the firm has been urging investors to instead consider its daily active user figures, which have seen double digit growth.
Additionally, investors were impressed by the fact that Twitter’s revenue was up 21% in the first quarter- can the firm top that in Q2? If not, the share price is likely to come back down to earth.
The bottom line for Twitter is that the company is struggling to compete against Goliath competitors like Facebook Inc. (NASDAQ:FB) whose monthly active users are more than double TWTR’s. I’m not sure I’m buying management’s rhetoric to use a different figure in order to measure the company’s success considering the two are operating in the same industry and targeting the same audience. For that reason, I’d say now is the time to book your gains and be thankful for the run TWTR’s given you over the past year.
Long-Term Winning Stocks to Sell: Hershey (HSY)
It feels a little bit sad to put a company like Hershey Co. (NYSE:HSY) on my sell list, but unfortunately the chocolate maker is starting to look a bit antiquated, making it one of my long-term winners to sell.
Despite bumps in the road, company has been delivering steady gains to investors over the years and it’s 2.76% dividend yield is one reason many have been holding on to their shares for such a long time. However, the firm has been struggling to remake its image for nearly 4 years as consumers become more health conscious and tastes shift toward more up-scale treats and HSY simply hasn’t been able to change with the times.
Chocolate sales make up the majority of Hershey’s overall revenue, making it difficult for HSY to make meaningful product additions in an effort to diversify and protect itself as consumers become more health-conscious. The bottom line for Hershey is that it’s lost its connection with consumers and that takes away a big part of the reason to hold on to the stock.
Long-Term Winning Stocks to Sell: Under Armour (UAA)
If you had the guts to pick up athletic apparel maker Under Armour Inc. (NYSE:UAA) back in 2017 when the share price dipped to $11, then you might want to consider taking profits now that you’ve nearly doubled your money. UAA stock has been making a real comeback so far in 2018, but the stock is unlikely to continue upwards because the firm’s underlying problems are still a major concern.
The firm’s most recent quarterly results confirmed that things are still looking dire at UAA with revenue in its home market still in the red and margins on the decline. Investors cheered the fact that UAA’s North American sales only declined by 1% last quarter, but compare that to competitors like Nike Inc. (NYSE:N) and Adidas AG whose North American sales are on fire, and you can clearly see the issue is solely an Under Armour problem.
Management has been pointing to the firm’s line up of high-profile athlete endorsements, but I think the firm needs more than just a few celebrities to revive the brand. The fact is that athleisure has become a competitive spaced UAA has failed to carve out its place as more brands moved in.
For that reason, I’d say UAA is due to take another crushing blow in the months to come so investors who’ve held out might want to jump ship now to protect their gains.
As of this writing, Laura Hoy was long FB
The Ultimate Marijuana Stock to Go Ballistic in the Next 90 Days
While we’re on the subject of investments that can help you build great wealth …
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