SPECIAL REPORT The Top 7 Stocks for 2024

3 Struggling Stocks to Sell in November Before They Implode

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  • Difficult growth prospects coupled with heightened competition should keep investors away from these three stocks:
  • Agilysys (AGYS): A recent rally in shares should not fool investors into holding a stock that has only delivered lackluster performance in 2023.
  • Hewlett Packard Enterprise Company (HPE): Structural headwinds continue to be a problem for HP.
  • Amplitude (AMPL): A lofty valuation and slowing growth make Amplitude a hard sell.
stocks - 3 Struggling Stocks to Sell in November Before They Implode

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Despite recent volatility, U.S. equities markets have had a much better year than expected in 2023. The S&P 500 and Nasdaq are only returning 9.8% and 25.5% since the start of the year. Geopolitical events that could move the world in different directions and soaring treasury yields were to blame for the market sell-off last week. Fortunately, this week, equities have begun to rebound, and treasuries have stabilized, but that does not mean there are not struggling stocks out there that investors should dump before.

Below are three stocks investors should dump before October ends.

Stocks to Sell: Agilysys (AGYS)

A white clock indicates it's time to sell.
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Agilysys (NASDAQ:AGYS) has made my ‘sell’ lists a couple of times in 2023, and enterprise software stock has not given me (or many current investors) any reason to hope for future gains. For readers unfamiliar with Agilysys, this company specializes in point-of-sales and property management software geared toward the hospitality end-market.

The company has been able to beat Wall Street’s estimates for the past few quarters, but investors have not always been convinced. For example, in mid-May, Agilisys announced record-beating fourth-quarter results for their 2023 fiscal year. Still, the company also announced it would be investing across all of its core businesses to drive future revenue growth, and equities investors were not happy, given where the macro environment was heading. Yesterday, second quarter results for the company’s fiscal year 2024 were released, indicating Agilysys delivered record revenue results, and stock rallied 25.3%.

The problem is that Agilysys is still trading at an immense premium with a forward-looking price-to-earnings (P/E) ratio of around 70.2x. Just because the company catapulted in value recently does not mean that the rally will extend significantly further. Investors should take whatever gains they have now before traders sour again AGYS’s prospects.

Hewlett Packard Enterprise Company (HPE)

Image of the Hewlett Packard Enterprise's building
Source: zakiahza / Shutterstock.com

Hewlett-Packard (NYSE:HPE) is a well-known name in the technology sector, but it is not a good investment option right now. The company operates in two segments: personal systems and printing. Both segments are facing structural challenges, such as declining PC demand, a shrinking printer market, and the commoditization of hardware products. Hewlett-Packard has been trying to diversify its revenue streams by expanding into cloud computing and artificial intelligence, but these efforts have not yielded significant results yet.

Hewlett-Packard’s financial performance has been lackluster in recent quarters. In the first, second, and third quarters of their fiscal year 2023, the company’s revenue has declined Y/Y. While Hewlett-Packard is trading at a low price-to-earnings ratio of 7.7x, that does not necessarily make the stock a bargain. The company has low growth potential, and given shares have already fallen 4.2%, investors are probably better off selling their current stakes.

Amplitude (AMPL)

Grayish photo of investor's hands hovering over laptop with red stock graph showing downward arrow overlayed on top of the image. falling stocks
Source: shutterstock.com/Leonid Sorokin

Amplitude (NASDAQ:AMPL) is a software company that provides analytics and personalization tools for digital products. The company went public in September 2021 through a direct listing, rising 9.0% on its debut trading day. However, since then, the stock has plunged 80.9%, as financial performance and an inflated valuation continue to disappoint investors. Revenue growth has definitely slipped from its pinnacle in 2021, where figures reached the high double digits. While revenue continues to scale in 2023, the year-over-year growth rates are much less impressive than they were years ago, which has caused investors to question Amplitude’s valuation, which sits at a lofty 100.5x forward earnings.

Moreover, Amplitude faces fierce competition from other players in the analytics space, such as Adobe (NASDAQ:ADBE), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), and Mixpanel. With these headwinds still very much intact, Amplitude is a among the top stocks to sell.

On the date of publication, Tyrik Torres 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.

Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.


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