7 F-Rated Stocks to Sell Right Now

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stocks to sell - 7 F-Rated Stocks to Sell Right Now

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We’re now at that point in this market correction where everyone is certainly paying attention, but there are still bulls out there talking about opportunity.

While opportunities exist, right now they will only be long-term opportunities because it doesn’t seem like we’re going to hit bottom until we figure out how much the U.S. economy will affected.

Numbers from China now show that the first quarter will be the first negative reading since 1992. And remember, this economy, even in bad times, was growing by 6% annually. The U.S. has been happy at 2%.

If the same drop in productivity and growth hits the U.S. and Europe, it will take some time to dig the economy out. But we don’t know. And that is the biggest issue in the markets right now.

Uncertainty is the most poisonous ingredient in a down market.

So to play it safe, as I hope you’re doing with the coronavirus from China, here are seven stocks to avoid at all costs due to their F ratings in my Portfolio Grader tool I use to find Growth Investor plays.

Stocks to Sell: Boeing (BA)

Stocks to Sell Now: Boeing (BA)

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Boeing (NYSE:BA) is a prime example of what is happening with blue-chip stocks these days. In the good times its seems the company was living off its reputation and the government’s largesse, rather than doing the great work it was always famous for doing.

World War II pilots used to say, “If it’s not Boeing, it ain’t going.” It’s certainly a different company today. From scandals to quality issues and cynical leadership, it seems this great company is even having trouble getting bailout money from the federal government.

And it’s still one of the top two commercial airline builders in the world. There’s a $60 billion stimulus package in Congress, but they don’t seem to be moving on it with great speed.

Congress may see this as a time rebuild the U.S. airline industry and some of its key components using the free market, rather than taxpayer money.

That would not be good news for Boeing. The stock continues to fall and is off 72% in the past 12 months, so its 8.4% dividend isn’t tempting.

Schlumberger (SLB)

Stocks to Sell Now: Schlumberger (SLB)

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Schlumberger (NYSE:SLB) is the world’s largest oil services company. It has been around since 1926, so it has seen its share boom and busts, both in the national economy and in the oil industry.

And that includes the Dust Bowl decade that coincided with the Great Depression. Oil is now trading more than 50% down from its prices a month ago. That means drillers stop drilling. And that means exploration shuts down.

At Growth Investor, we’re staying far away from those groups right now. The enormous debt these companies took on during boom times is now coming back to bite them, resulting in dividend cuts — and thus widespread abandonment by investors. Yet both those sectors are the bread and butter for SLB.

That’s why the stock is off 72%.

Much of the concern is how bad the productivity of Europe and the U.S. will be hit by Covid-19. And how much the consumer — the group that has kept the rally alive in the U.S. — fares after lost wages and in many cases, lost jobs.

The stock’s 16.6% dividend certainly looks tempting now, but it’s cold comfort given the stock’s current performance and short-term prospects.

Halliburton (HAL)

Stocks to Sell Now: Halliburton (HAL)

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Halliburton (NYSE: HAL) is another major oil services company. And it’s having the same problems as SLB.

Earlier this week, it furloughed 3,500 workers. And that is just the beginning of the belt tightening. Most analysts have cut their stock price target in half or more. HAL stock is off 84% in the past year, 77% in the past month.

There’s a challenge today for these big firms — keeping the stock alive at the expense of the workforce, or vice versa. When stocks are in this kind of tailspin, they’re almost impossible to separate from one another and both pull the other down.

Cutting workers helps keep analysts satisfied that you’re doing everything you can to keep the numbers good. But cutting the workforce means you can’t produce like you used to.

Its 15% dividend is certainly tempting, but it does little to offset those losses.

Under Armour (UA)

Stocks to Sell: Under Armour (UA)

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Under Armour (NYSE:UA) is one of the biggest sportswear brands out there. And it has had quite a run in its young life.

Started in the basement of founder and CEO Kevin Plank’s parents’ house, using his mom’s sewing machine, it became one of the biggest names in performance apparel for professional athletes in short order.

And then it expanded its product lines and its distribution and went global. Its growth story boosted its reputation on Wall Street — analysts love growth stories — and soon it was talked about as the Nike (NKE) slayer of sportswear.

But the economy slowed, the stock deflated and the trade war began. Under Armour was still doing well, but it wasn’t the giant slayer it was foretold to be.

Even now, after losing 61% year-to-date, UA is trading at a current price-earnings ratio of 38. That may have been reasonable a couple months ago, but not now. And there’s not much growth to be had for this growth stock in coming months. There are much better opportunities ahead in other sectors.

Wayfair (W)

Take a Hard Pass on Wayfair Stock, Even as It Hits Growth Numbers

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Wayfair (NYSE:W) is built on two strengths of the U.S. economy that are now weaknesses — consumer spending and consumer credit.

Wayfair is a massive online home furnishings store that launched in 2002. Recently it has spent huge money on advertising campaigns to bring in the business.

And even before the virus hit, W was struggling. It lost almost $1 billion in 2019. It brought in $2.5 billion but also has $1.5 billion in outstanding long-term debt.

Now, consumers are focusing their spending elsewhere. And buying on credit is likely going to be more of a burden than a benefit. People are losing their jobs and covering current bills is going to get tougher if this cycle turns into a recession.

The stock is off 70% year-to-date and 85% in the past 12 months. This company needs a strong economy to make a comeback of any significance. And we’re not there.

Macy’s (M)

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Macy’s (NYSE:M) has done a good job avoiding the fate of many of its department store peers. Yet it has continued to struggle.

And the coronavirus may be close to its death knell. Macy’s remains a retail business that needs shoppers in the stores. While it has done a good job migrating to an online model, it’s not the first place shoppers go to buy online.

The advantage of a department store is going from department to department, trying on clothes, looking for a bag to match the dress and shoes in real time, with real products.

Plus, the trade war with China didn’t help with stocking merchandise and now a weakened consumer and less buying power.

The stock is off 62% year-to-date and 73% in the past 12 months. It has a whopping 22.6% dividend, but it won’t be able to sustain that. And when it gets cut, the stock will fall even harder. Meanwhile, the stocks I’m most excited about now are heavyweights in a growing industry, long-term.

Devon Energy (DVN)

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Devon Energy (NYSE:DVN) is a U.S.-based exploration and production company that has been around the energy patch — both onshore and offshore — for decades.

But it has had troubles keeping the momentum going as far back as 2014. The stock peaked around $114 a share in 2008 and then drifted down. But before the troubles in the energy sector in 2014, it was still trading around $74.

It has never seen those prices again. Today it trades below $7 a share. It has had problems in its fields and has been laying off workers over the past couple of years, even when oil firms were doing well.

With the current blow to oil prices and its precarious state, it’s going to be tough for DVN to make it out in one piece. The stock is off 75% year-to-date, and off 82% in the past 12 months. Its nearly 7% dividend doesn’t help and, like its peers, may be cut if things don’t improve soon. And that just makes a bad situation worse.

Overall, I’d stay away from energy at this point — and I wouldn’t buy ANY stocks until the market volatility eases up, we get clarity on the coronavirus situation, and earnings start to come in.

Once the all-clear signal sounds, you’ll still want to focus on companies with strong fundamentals and the best growth prospects. That’s what I’m finding in the field of 5G wireless infrastructure.

The 5G Buildout Is an Incredible Opportunity for Investors Right Now

Within two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. With 5G, we’ll have cable modem speeds on any device; no need to plug in. That’s a big deal for rural areas … the very same areas that are also key to President Donald Trump’s reelection. So, by pushing 5G over the goal line, Trump will deliver a big win for his base — and strike a blow against Chinese rivals like Huawei Technologies.

But, in the big picture, 5G is about much more than trade wars and faster downloads. Because 5G is 100 times faster than 4G, it’ll allow your internet devices to work in real time. That advancement is a game changer for tech companies.

With the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity with 5G stocks now.

Cable companies can do their best to fight back with fiber optics … but they can’t compete with the convenience of a smartphone, once it’s got ultra-fast 5G. That’s how my 5G infrastructure play will capture more market share from the broadband cable companies.

The stock I’m targeting is a favorite on Wall Street, and it has strong fundamentals, too — making it an A-rated “Strong Buy” in my Portfolio Grader system.

Click here to watch my new, free briefing on this extraordinary technology and the opportunity with 5G stocks.

When you do, you’ll see how to claim a free copy of my new stock report, The Netflix of 5G, which has full details on this company — and what makes it such a great investment.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.


Article printed from InvestorPlace Media, https://investorplace.com/2020/03/7-f-rated-stocks-to-sell-right-now-coronavirus/.

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