Uncertainty abounds in the market right now.
Whether driven by fears tied to surging inflation, rising interest rates, or geopolitical turmoil, investors have plenty to consider moving forward. This may mean that investors are focused more on stocks to sell rather than stocks to buy at this point in the economic cycle.
Indeed, bearish reasons prevail. If any sort of shock hits the market, I would argue that valuations aren’t positioned to absorb any sort of hit. Thus, the market is priced for basically a soft landing currently.
Thus, for investors looking for defensive stocks to buy, I’ve got some recommendations in previous articles. But for those seeking stocks to sell right now, these few companies are likely to underperform, particularly if things get worse.
Mullen Automotive (MULN)
Mullen Automotive (NASDAQ:MULN) shares have continued to get cheaper. Newfound concerns about a potential delisting are creating even more havoc for the stock in recent weeks.
The company has made some strides to right its ship. However, plenty of work needs to be done on the production front. And like so many early-stage EV makers, it’s a question of the amount of capital that will be needed (and when). Also, the length of time it will take for Mullen to become profitable is on the mind of investors.
In this regard, Mullen’s recent open letter to shareholders hasn’t done much to assuage investor concerns. The company noted various production milestones, its mitigation strategy for delisting, and some new commercial orders. But until these orders flow through to production, and eventual cash flow, investors in the EV sector will be hesitant. Rather, they are likely to focus on other currently profitable names. So, for most investors, Mullen certainly fits the bill of a shaky stock to sell.
Moderna (MRNA)
The Covid-19 pandemic provided the market with its most recent shock, and tragedy for so many families across the country and the world. However, certain companies emerged from the pandemic as clear leaders in their respective industries. Moderna (NASDAQ:MRNA) is one example of a pandemic winner, that has since turned south.
Shares of MRNA stock are now trading around $100 each, a far cry from the company’s all-time high of nearly $500 per share in mid-2021.
Of course, the picture for Covid vaccine stocks is drastically different today than it was in mid-2021. And Moderna’s pipeline, while robust, will still take some time to be fleshed out. Accordingly, for investors seeking cash flow stability in the quarters to come, concerns are worth noting.
Even though Moderna has compelling technology, it may not be a good bet anymore, since it shows declining revenue forecasts moving forward. Thus, this is a stock sell bucket, at least for now.
Dollar General (DG)
Dollar General’s (NYSE:DG) recent plunge is noteworthy.
The discount retailer has reasons behind its continuing struggle. The company lacks transition growth, with its top-line revenue numbers underperforming in recent quarters.
This has been driven by slower-than-expected traffic, as well as a smaller cart for its core consumer. Additionally, shrink, or theft, is becoming increasingly prescient for the company. This is a worrisome and important driver that investors will need to watch moving forward.
Furthermore, inflationary concerns appear to be hampering Dollar General’s bottom line. That is, the company isn’t able to pass on costs to its consumers as many have expected. Thus, until inflation abates, and the company’s fundamentals improve, investors should be cautious of this stock.
On the date of publication, Chris MacDonald 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.
