June has arrived and as we move into the summer, now is an opportune time to adjust one’s portfolio and purge some stocks that are under performing or likely to do so in the future. Whether a stock has been pulled lower by a sector downturn, has been hurt by market volatility, or has fallen out of favour with investors, there are many reasons to reevaluate a security and purge it from a portfolio.
As a general rule, investors should jettison a stock after it declines 7% to 9% and move capital into more promising investments. If there’s reason to believe that a high-flying stock is likely to decline, then investors might also want to sell and take profits. Here are seven top stocks to sell in the month of June.
- Gannett Co. (NYSE:GCI)
- Canopy Growth (NASDAQ:CGC)
- Tesla (NASDAQ:TSLA)
- Airbnb (NASDAQ:ABNB)
- Twitter (NYSE:TWTR)
- Beyond Meat (NASDAQ:BYND)
- Zoom Video (NASDAQ:ZM)
Top Stocks To Sell For June: Gannett Co. (GCI)
Newspapers are so last century. Yet, McLean, Virginia-based Gannett Co. continues to be all in on newsprint. As the largest publisher of daily newspapers in the U.S., Gannett still owns some marquee titles, including its flagship national publication, USA Today, as well as The Detroit Free Press, Indianapolis Star and Cincinnati Enquirer. However, the newspaper industry continues to erode as readers migrate online, circulation numbers decline and advertisers flee. The result is that GCI stock continues to be downgraded by analysts and today trades at $5.19 per share, barely above penny stock territory.
In the last five years, GCI stock has fallen 71% (it used to trade right around $20 a share) and shows no signs of reversing its downward spiral. In its most recent quarterly results, Gannett reported that its net loss grew to $142.3 million, or $1.06 a share, from $80.2 million, or 61 cents a share, a year earlier. The company’s revenue fell nearly 20% to $777.1 million as advertising across its publications continued to decline, and revenue from newspaper circulation dropped 13.2% to $325.4 million in the quarter. The bottom line is that newspapers are not a growth business. Not anymore. Get out of GCI stock while the getting is good.
Canopy Growth (CGC)
Speaking of disappointing financial results, how about Canadian cannabis producer Canopy Growth? The company, based in rural Smiths Falls, Ontario, just reported fiscal fourth-quarter and full year results that missed analysts expectations by a wide margin. Specifically, Canopy Growth posted a net loss of $616.7 million for the fourth quarter and a year-end loss of $1.67 billion due to declining sales and hefty inventory charges. Canopy Growth reported $148 million in revenue for its fiscal fourth quarter, up 38% from a year earlier but down 3% from its fiscal third quarter. The company has blamed ongoing Covid-19 restrictions in Canada for hurting its sales.
Once the dominant player in Canada’s recreational cannabis market, Canopy Growth has lost that title to rival Tilray (NASDAQ:TLRY) following that company’s merger with Aphria. Other consolidation continues to happen in Canada’s cannabis market as companies jockey for market share. For its part, Canopy Growth says that it remains the top seller of dried flower products with a 19% market share and that it has a leading position in vape and infused beverage products according to its own internal metrics. Cold comfort given the company’s deteriorating finances.
CGC stock is currently worth $25.35, down 37% since mid-February this year.
Top Stocks To Sell For June: Tesla (TSLA)
Tesla has long been the target of short-sellers on Wall Street, i.e. traders who are betting that the company is grossly overvalued and its stock price is destined to fall. However, the pessimism regarding Tesla got ratcheted up a notch after it was disclosed that legendary trader Michael Burry has a massive short bet against the electric carmaker. Burry, who is a medical doctor by training, famously bet against the U.S. housing market during the sub-prime mortgage mess that preceded the 2008-2009 financial crisis.
When the housing market imploded, Burry reportedly made $100 million for himself and $700 million for his investors. Now, it has been disclosed that Burry has a $530 million bet against Tesla. Burry has said that Tesla’s reliance on regulatory credits to generate profits is problematic and will hurt the company’s long-term outlook. He’s also said that Tesla’s current share price of $583.95 is too high and due for a correction. Analysts took their feet off their desks when Burry’s short position in Tesla was disclosed in a regulatory filing.
TSLA stock had been slumping before Burry’s short position came to light and is down 17% year-to-date from a 52-week high of $900.40 reached in late January. Take profits while you still can.
Airbnb (ABNB)
Airbnb’s stock has been a real disappointment since the company went public last December. And, sadly, the situation does not look like it will improve anytime soon. The San Francisco-based online marketplace for home stays and vacation rentals has seen its share price collapse 30% since mid-February, dropping from a peak of $219.94 to just under $150 a share today. The decline has occurred despite the fact that Airbnb is in a prime position to benefit from the post-pandemic economic reopening and resumption of travel that’s expected this summer.
The company’s financial results haven’t helped its cause. Airbnb reported a first-quarter net loss of $1.2 billion, which it attributed to a 42% year-over-year decline in travel spending. The company did report that its first-quarter revenue rose 5% year-over-year to $887 million. But that hasn’t been enough to move the needle on ABNB stock. Some analysts are wondering aloud if the market has lost interest in the home sharing narrative and if Airbnb’s share price might have even further to fall.
With so many other travel-related stocks performing well right now, there’s no reason to hold onto Airbnb stock and watch it slump further. Dump it.
Top Stocks To Sell For June: Twitter (TWTR)
Twitter is getting a little long in the tooth, both as a social media company and as a stock. TWTR shares are down over 23% since March 1 as investors rotate out of technology growth securities and into value and cyclical plays that are likely to move higher with the economic reopening. However, Twitter’s problems go beyond the current rotation. The company continues to struggle with ways to diversify and grow its revenue and monetize its user base.
Twitter just launched a trial of a new monthly subscription service in Canada and Australia to complement its advertising heavy revenue. For the equivalent of $2.99 a month, subscribers get access to unique features such as an edit button that enables people to fix typos before a Tweet goes live, an improved bookmarking system for saved tweets, and faster response times from Twitter’s support team to address user issues. The company is calling its monthly subscription service “Twitter Blue.”
To help in its subscription push, Twitter is acquiring Scroll, a subscription-content platform that charges $5 a month to remove advertisements from participating news sites. While the Scroll deal sounds promising, Twitter’s share price fell sharply after the company provided weak forward guidance for the current second quarter, saying it expects revenue to be flat compared to the first quarter and that expenses will rise as it hires more employees.
With the future uncertain, investors should look to other social media stocks for gains. Don’t hold TWTR stock any longer than you have to.
Beyond Meat (BYND)
It’s time to admit that fake meat hasn’t taken off as hoped. Plant-based burgers sound like a good idea until you’re reminded that less than 5% of the world’s population are vegetarian or vegan. The vast majority of people continue to be carnivores. And a big shift to vegetarianism does not look likely to happen anytime soon. This reality helps to explain why Beyond Meat has struggled to grow its business, and why BYND stock has been on a downward slope since the company went public in 2019, falling 22% since late January at $149.74 a share.
The company reported underwhelming first-quarter results. Beyond Meat announced a first quarter loss per share of $0.42 cents, much greater than the $0.19 per share loss expected by analysts. Revenue also missed, coming in at $108.2 million versus $113.7 million expected by analysts. It was the third consecutive quarter in which Beyond Meat reported a wider-than-expected loss.
Beyond Meat continues to struggle to find a global market for its plant-based products in a meat dominated world. Time to ring the register on BYND stock.
Top Stocks To Sell For June: Zoom Video (ZM)
Video conference calls will continue after the pandemic, but not to the same extent. People are returning to the office, and school and in-person meetings and learning will resume. This does not bode well for Zoom Video. The Silicon Valley-based company is not likely to experience a sharp downturn in its business, but it will be difficult to sustain the torrid pace of growth that Zoom Video enjoyed as the pandemic pushed us all online. After running up 65% in the past 12-months to $341.71, there likely isn’t too much more runway ahead for ZM stock. If there’s a growth stock that’s exhausted after running full tilt over the past year, it’s Zoom Video.
Zoom Video acknowledged that it can’t maintain its current growth when it reported first-quarter earnings, providing guidance for the second-quarter of $1.14 a share and revenue of $985 million. For the full 2022 fiscal year, Zoom projects earnings per share between $4.56 and $4.61 and revenue of $3.98 billion to $3.99 billion. While solid numbers, that guidance came as a disappointment as it represents a sizable slowdown for the company. ZM stock fell on the forward guidance. Investors shouldn’t wait around for things to get worse.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
