7 Market Heavyweights to Ditch Before the Selloff

Various troubles loom over these big-name companies, quickly making them stocks to sell

By Anthony Mirhaydari, InvestorPlace Market Strategist

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U.S. equities opened lower on Monday, led by weakness in high-profile technology stocks and the U.S. dollar. Investors remained concerned about the likelihood of additional trade tariffs against China on reports President Trump is getting ready to unveil another package of taxes on $200 billion worth of imports.

Breadth has been weakening for weeks, resulting in a cluster of “Hindenburg Omen” technical warning signals. Yet many major mega-cap stocks have been steadfast, helping to keep the major averages aloft. But that’s changing now, as the weakness that first hit emerging market issues and small-caps is now spreading to market leaders.

Here are seven stocks to sell — many key components in the Dow Jones Industrial Average and S&P 500 indices — that are rolling over now.

Stocks to Sell: Alphabet (GOOG)

Stocks to Sell: Alphabet (GOOG)

Battered by political attention and acquisitions of bias in recent days, shares of Google parent Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are threatening to break down out of a month-to-date consolidation range that has capped a near-10% decline from the late July high. Watch for a move down to the 200-day moving average last tested in early May.

The company will next report results on Oct. 22, after the close. Analysts are looking for earnings of $10.49 per share on revenues of $27.25 billion. When the company last reported on July 23, earnings of $11.75 beat estimates by $2.05 on a 25.6% rise in revenues.

Stocks to Sell: Facebook (FB)

Stocks to Sell: Facebook (FB)

Shares of social media icon Facebook (NASDAQ:FB) have been under persistent selling pressure as a data privacy scandal and weakening user growth metrics snapped prices down out of the highs set in late July. So far, the losses total nearly 30%, as the lows seen back in April are tested.

The company will next report results on Oct. 24, after the close. Analysts are looking for earnings of $1.48 per share on revenues of $14.3 billion. When the company last reported on July 25, earnings of $1.74 beat estimates by 4 cents on a 41.9% rise in revenues.

Stocks to Sell: Wells Fargo (WFC)

Stocks to Sell: Wells Fargo (WFC)

Bank stocks such as Wells Fargo (NYSE:WFC) have been under deepening pressure this month on worries that higher inflation pressures will force a more aggressive rate hike path from the Federal Reserve. As such, many bank stocks have quickly started to populate lists of stocks to sell. The issue is amplified by the fact that as rates have risen, it has already had a negative impact on the housing market. Shares are already down more than 9% from the highs seen in late August.

The company will next report results on Oct. 12, before the bell. Analysts are looking for earnings of $1.17 per share on revenues of $21.5 billion. When the company last reported on July 13, earnings of $1.08 per share missed estimates by 4 cents on a 3.1% decline in revenues.

Stocks to Sell: Disney (DIS)

Stocks to Sell: Disney (DIS)

Shares of Disney (NYSE:DIS) are falling further away from their 20-day and 50-day moving averages, building on a loss of nearly 8% from the highs set in early August. The stock has been hit by doubts over the upcoming launch of its own over-the-top streaming service and fears the Star Wars franchise is losing some steam (after underwhelming results for the Han Solo spinoff).

The company will next report results on Nov. 6, after the close. Analysts are looking for earnings of $1.31 per share on revenues of $13.8 billion. When the company last reported on Aug. 7, earnings of $1.87 missed estimates by 8 cents on a 7% rise in revenues.

Stocks to Sell: McDonald’s (MCD)

Stocks to Sell: McDonald's (MCD)

McDonald’s (NYSE:MCD) shares have sliced down through their 50-day moving average as the churning trading range that’s been in place since February continues to roll on. Analysts at the Telsey Advisory Group recently cut their price target to $175 from $190 on a drop in earning estimates driven by a more aggressive marketing spend, softening same-store sales trends and headwinds from currency movements.

The company will next report results on Oct. 25, before the bell. Analysts are looking for earnings of $2 per share on revenues of $5.3 billion. When the company last reported on July 26, earnings of $1.99 beat estimates by 7 cents per share on an 11.5% drop in revenues.

Stocks to Sell: Goldman Sachs (GS)

Stocks to Sell: Goldman Sachs (GS)

Shares of Goldman Sachs (NYSE:GS) remain deep in downtrend territory, mired beneath its 20-day, 50-day and 200-day moving averages. Already down nearly 17% from their March high, watch for another 4% downside extension to test support from the June/July lows. Like WFC shares, GS stock is being negatively impacted by worries over the impact higher rates will have on loan demand and debt issuance.

The company will next report results on Oct. 16, before the bell. Analysts are looking for earnings of $5.68 per share on revenues of $8.54 billion. When the company last reported on July 17, earnings of $5.98 per share beat estimates by $1.33 on a 19.2% rise in revenues.

Stocks to Sell: Twitter (TWTR)

Stocks to Sell: Twitter (TWTR)

Twitter (NYSE:TWTR) shares are falling out of a multi-week trading range to test lows not seen since April for a total decline of roughly 40% from the high set in the middle of June. Twitter, like Facebook, is seeing its share price suffer as a result of political pressure and accusations of bias on its platform. Analysts at MoffettNathanson recently lowered their price target on the stock and maintained a Sell rating.

The company will next report results on Oct. 26, before the bell. Analysts are looking for earnings of 5 cents per share on revenues of $703.7 million. When the company last reported on July 27, earnings of 17 cents per share beat estimates by a penny on a 23.8% rise in revenues.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.


Article printed from InvestorPlace Media, https://investorplace.com/2018/09/7-market-heavyweights-that-are-quickly-becoming-stocks-to-sell/.

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