It’s springtime and now would be as good a time as any to rebalance one’s portfolio. Out with the old and in with the new, as the saying goes. And as the seasons change, why not take some time to evaluate your portfolio to purge the stocks to sell for April?
After all, why hold on to your worst-performing stocks when you can take new positions that are more likely to bear fruit?
Portfolio rebalancing can be extremely positive and experts recommend that it be done every quarter, or, at a minimum, a couple of times each year. With markets currently shifting out of big growth technology names and securities that flourished during the Covid-19 pandemic, now would be a prudent time to take stock of a portfolio and make some healthy changes.
Here are four stocks to sell in April.
- Tesla (NASDAQ:TSLA)
- Palantir Technologies (NYSE:PLTR)
- Peloton Interactive (NASDAQ:PTON)
- Alibaba (NYSE:BABA)
Stocks To Sell for April: Tesla (TSLA)
The problem in evaluating Tesla, the world’s leading electric vehicle maker, is that the price targets and forecasts on the stock are all over the place.
Cathie Wood at Ark Invest remains bullish and recently said that she sees TSLA stock reaching $3,000 a share by 2025. However, 34 analysts polled by MarketBeat have an average 12-month price target on the stock of $324.92 per share, basically half its current price of $660.
Few stocks are as polarizing as Tesla. People seem to feel the stock is either overvalued or undervalued depending on how they feel about the future of the electric vehicle market.
Investors taking a short-term view of the market may want to sell TSLA stock in April. The bearish case against the stock include the fact that Tesla faces growing competition from established automakers such as General Motors (NYSE:GM) and Volkswagen (OTCMKTS:VWAGY).
A recent report from Deutsche Bank forecasts that Volkswagen’s battery-electric vehicle business could be worth $230 billion, more than the entire automaker is currently worth. And Deutsche Bank forecasts that VW will surpass Tesla in electric-vehicle sales as soon as next year.
Additionally, Tesla is currently the subject of federal investigation after one of its Model Y vehicles crashed into a stationary police car in Michigan while operating in autopilot mode. It has been forced to recall 134,951 of its Model X and Model S vehicles due to problems with the infotainment system. Tesla also ranked at the bottom of various vehicle quality surveys, with JD Power noting that consumers often receive a Tesla vehicle that does not even have the seats bolted into place.
With the current rotation out of technology stocks, it makes sense to put Tesla on your list of stocks to sell for April.
Palantir Technologies (PLTR)
The stock of data analytics company Palantir is now down 35% from its 52-week high reached in late January of this year. Few technology stocks have been hit as hard as Palantir by the rotation into value and cyclical securities.
The share price has been so battered that Palantir co-founder and chief executive Alex Karp recently railed against Wall Street’s “corrosive short-term thinking.” Karp said that Wall Street’s focus on quick, short-term gains is “one of the most destructive, corrosive attributes of an otherwise interesting and largely functioning system.”
While Karp’s comments raised some eyebrows among professional traders, his criticisms did not draw as much attention as news that Palantir co-founder and billionaire venture capitalist Peter Thiel sold more than 20 million shares of Palantir on Feb. 18 as the lock-up period following the stock’s direct listing on the New York Stock Exchange last September. The stock sale did not provide a vote of confidence for outside investors at a time of market turmoil.
Add in the fact that many investors criticize Palantir for its murky operations and dealings, claiming that they can’t even understand what Palantir does for its government clients such as the Department of Defense, the Central Intelligence Agency and the Immigration and Customs Enforcement. It might be time to take a cue from Thiel and unload PLTR stock before the price slides even further from its current level of $23.
Stocks To Sell for April: Peloton Interactive (PTON)
Home fitness company Peloton has had a good run. During the pandemic of the past year, orders for Peloton’s exercise bikes and treadmills spiked so much that the company had difficulty fulfilling them.
PTON stock rose 512% to a 52-week high of $171.09 and seemed unstoppable. With gyms and fitness centers closed around the world, home workouts became the only option for people wanting to maintain their exercise routines.
But now, with Covid-19 vaccines being successfully rolled out and local economies reopening, people are abandoning their home exercise equipment to return to the public gyms and private health clubs where they enjoy both exercising and socializing. This reversal is not good for Peloton shareholders.
PTON stock has fallen 26% year-to-date and now trades at $112. The slide has been persistent and steady since mid-January and looks likely to continue as people focus on stocks that are likely to benefit from the economic reopening and move away from securities that flourished during the pandemic lock down.
The company is trying to diversify, having purchased several other companies that could take it into new areas such as artificial intelligence, wearable technology and digital voice assistants. But whether any of these new directions will lead anywhere remains to be seen and there’s no telling how long it could take.
Given the impending end of the pandemic, PTON makes the list of stocks to sell for April.
Technology and e-commerce giant Alibaba has been so beaten up over the past six months that the company and its stock are black and blue at this point.
The litany of problems has been many. Chinese authorities have cracked down on the company, halting its $37 billion initial public offering of the Ant Group fintech firm and forcing Chief Executive Officer Jack Ma to adopt a much lower public profile.
At the same time, political tensions between Washington and Beijing continue to be at a boiling point and U.S. securities regulators have trained their sites on Chinese companies listed on American stock exchanges, threatening to delist them if they don’t comply with U.S. audit standards.
All of this has seriously depressed BABA stock. Since peaking at a 52-week high of $319.32 on Oct. 27, the share price has declined 26% and been stuck around $225 a share since January. At this point, it looks like it will take a stick of dynamite to move the share price.
All of this is incredibly disappointing for investors who view Alibaba as the best of breed among Chinese stocks. The company, which is involved in everything from online shopping to artificial intelligence, has been called China’s answer to both Amazon (NASDAQ:AMZN) and Alphabet’s Google (NASDAQ:GOOG, NASDAQ:GOOGL) combined.
While the long-term story for Alibaba may still be positive, the stock is a disaster in the short-term and investors should unwind their positions as quickly as possible.
On the date of publication, Joel Baglole held a long position in BABA. He did not have (either directly or indirectly) any positions in the securities mentioned in this article.