3 Stocks to Sell ASAP Before They Implode

  • These stocks to sell are likely to bleed more cash and erode shareholder value in the coming months.
  • Blue Apron (APRN): Mounting cost pressures continue to weigh down profitability.
  • Meta Platforms (META): The metaverse project is putting Meta in a precarious situation.
  • Tilray (TLRY): Even if interest rates revert back to 2021 levels, Tilray remains only a speculative bet.
Stocks to Sell - 3 Stocks to Sell ASAP Before They Implode

Source: Shutterstock

As we look ahead to next year, we must consider which stocks to sell and which opportunities to pursue. This year has been about de-risking portfolios, and that trend will likely continue for the foreseeable future.

Stocks have been under duress for several months now, and the trend isn’t going away anytime soon. The Federal Reserve has been raising interest rates aggressively, putting immense pressure on growth stocks, which still trade at relatively high valuations. If interest rates continue to rise, these stocks will likely experience even more compression.

Furthermore, economic growth is slowing down. If there is a recession, the market will only worsen. However, some stocks are more poised to wither in the painful downturn than others. Let’s look at three such stocks you should probably discard from your portfolios.

Symbol Company Price
APRN Blue Apron $1.16
META Meta Platforms $117.90
TLRY Tilray $4.30

Blue Apron (APRN)

Image of the Blue Apron (APRN) logo on one of the company's branded cardboard boxes used for its deliveries. It features several images of vegetables and kitchen tools on the side, next to the logo.
Source: Roman Tiraspolsky / Shutterstock.com

This surge in demand for online grocery shopping has been a boon for companies such as Blue Apron (NYSE:APRN), which delivers meal kits straight to your door. Founded in 2012, Blue Apron was one of the first companies to enter the meal kit delivery space. As of 2017, the firm boasted a market share of 40%, which stands at just 9% at this time.

Given the unfavorable market conditions, the firm has been facing rising cost pressures leading to widening losses. Moreover, its liquidity concerns point to more shareholder dilution ahead.

The path toward profitability is a massive concern for the business. The combination of rising costs, growing competition, and customers being squeezed by inflation has made the goal of breaking even elusive. Therefore, it’s one of the stocks to sell before it sheds more value in the upcoming quarters.

Meta Platforms (META)

Meta Written On The Googles - Man Wearing Virtual Reality Goggles Inside A Metaverse. FTC investigating META.
Source: Aleem Zahid Khan / Shutterstock.com

Tech giant Meta Platforms (NASDAQ:META) has witnessed remarkable volatility this year, as have its peers. Its deplorable performance in the stock market this year can be widely attributed to inflation and the Fed’s response. Its business depends heavily on advertising revenue. As interest rates rise and the economy slows, businesses are less likely to advertise, directly impacting the top and bottom-line results of companies that depend on ad revenue.

Most of its problems, though, are self-inflicted. Its metaverse experiment under its Reality Labs segment has failed to deliver so far, burning its cash reserves at a healthy pace. The segment is losing billions each quarter, and while it may seem like a pittance to an enterprise such as Meta, it’s adding up significantly. Even if the plan materializes, it will take a lot of years before it impacts company sales. Meanwhile, META stock will continue to shed more value for the foreseeable future.

Tilray (TLRY)

Close view of Tilray (TLRY) logo on a smart phone. Tilray specializes in cannabis research, cultivation, processing and distribution
Source: Lori Butcher / Shutterstock.com

Tilray (NASDAQ:TLRY) is one of the top Canadian licensed producers and the largest cannabis businesses in the world. It’s done well to grow its business inorganically through its major acquisitions and investments in Aphria and Hexo. However, its acquisitions haven’t borne much fruit, with its results in both medical and adult-use markets down from the prior-year period. Moreover, it has limited access to the U.S. marijuana market, which makes it an unattractive U.S. legalization play.

Quantitative tightening has taken a toll on Tilray and other speculative growth stocks. However, companies in the cannabis sector haven’t learned how to make money efficiently, and Tilray is no different, with its stock taking a hammering. Even if interest rates were to revert to 2021 levels overnight, it shouldn’t be enough to save Tilray. Its recent earnings results show that it is not growing quickly enough to justify its stock price. Thus, it is one of the stocks to sell.

On the date of publication, Muslim Farooque 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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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