This is an ideal time to clear your portfolio from F-rated stocks to sell.
Face it – F-rated stocks can ruin your holiday by sinking your investments. This has been a difficult year already for many investors as major indices spent much of 2022 in bear market territory. And while some stocks on the market are enticing sales, there are other real stocks to sell that are the proverbial coal in your stocking if you’re still holding them.
The Portfolio Grader is a great tool to help you find stocks to sell. Using qualitative metrics, analyst sentiment, momentum, and earnings history, the Portfolio Grader ranks stocks with an “A” through “F” measurement.
These are seven F-rated stocks to sell that should be on any investor’s naughty list:
Opendoor Technologies (OPEN)
Opendoor Technologies (NASDAQ:OPEN) is an online marketplace for buying and selling residential real estate. That’s not a great business to be in these days, as the average 30-year fixed mortgage carries an interest rate these days of around 7%.
OPEN stock is close to its 52-week low, a drop of more than 85% on the year, making it one of the stocks to sell while you still can.
People simply aren’t buying and selling houses right now. The National Association of Realtors reports that existing home sales fell in October for the ninth consecutive month. On a year-over-year basis, sales were down by 28.4%.
In an effort to stop the bleeding, Opendoor announced a partnership with buying and selling platform Zillow (NASDAQ:Z, NASDAQ:ZG) in August. The deal allows home sellers on Zillow’s network to request an Opendoor offer to sell their properties.
But that kind of partnership isn’t going to help as long as interest rates remain high, and the housing market is cold. OPEN stock has an “F” rating in the Portfolio Grader.
Redfin Corporation (RDFN)
The same headwinds affecting Opendoor are putting a damper on Redfin Corporation (NASDAQ:RDFN). Redfin is also an online tech-driven real estate company that helps people with buying, rentals, title insurance and other property-based services.
Redfin stock is down 86% so far this year, making it one of the stocks to sell on weakness. The company announced a layoff of 13% of its workforce in November. It also said it was shutting down its iBuying service, known as Redfin Now, and acknowledged that the housing market is likely to continue to shrink in 2023.
Redfin missed earnings estimates in each of the last two quarters, coming in at $600.52 million in revenue in Q3, with an earnings loss of 82 cents per share. Analysts were looking for revenue of $602.67 million and a loss of 78 cents per share.
With the housing market’s prospects weak headed into 2023, RDFN stock has an “F” rating in the Portfolio Grader.
Meta Platforms (META)
How the mighty have fallen. Meta Platforms (NASDAQ:META) still has a position as one of the FAANG stocks thanks to its ownership of the Facebook social media platform, but the similarities to that huge growth company of yesteryear are stark.
META stock is down more than 65% so far this year as investors are not buying into CEO and founder Mark Zuckerberg’s vision of the company as a metaverse business. Zuckerberg issued an apology to the company’s employees as he announced a massive layoff of more than 11,000 people – about 11% of the company’s workforce.
The layoffs won’t likely have a major impact on the company’s expenses, however. META is anticipating somewhere between $34 billion to $37 billion in capital expenditures in 2023 as it works on building out Zuckerberg’s vision of the metaverse.
META stock has an “F” rating in the Portfolio Grader.
Carvana (NYSE:CVNA) lets people shop for and buy vehicles online.
Once you pick out the car that you like, Carvana either ships it to you or you can pick it up at one of its giant vehicle vending machines. Then you test-drive it before signing the final paperwork, and you have a full week to decide if you really want to keep it. Carvana also lets you sell your car online and will come and pick it up.
While the platform is easy to use, the cost of vehicles is prohibitive. A shortage of available vehicles pushed car prices higher in 2022. And while those prices are starting to fall now, a J.D. Power analyst believes that the market won’t really bottom until 2025.
CVNA stock is down 96% on the year and has an “F” rating in the Portfolio Grader.
Mind Medicine (MNMD)
Mind Medicine (NASDAQ:MNMD) is a psychedelic-medicine developer. It makes medical and/or mental health treatments based on psychedelic medicine. Its leading drug candidate, MM-120, is based on LSD D-tartrate, a hallucinogen that’s a common salt form of LSD.
The stock fell more than 87% this year, including a huge 51% drop when it announced in September that it would sell more than 7 million shares.
One investor, FCM MM Holdings, sent a letter to the board of directors expressing “vehement opposition” to the stock sale and accusing management of destroying shareholder value.
FCM Chief Executive Manager Jake Freeman declared that his firm is “committed to taking whatever actions are necessary to protect the interest of shareholders, and we look forward to engaging in a zealous proxy campaign.”
MNMD stock trades at less than $3 per share and managed to avoid delisting by the Nasdaq exchange thanks to a 1-for-15 reverse stock split that helped push the price over $1 per share. It rightly deserves its “F” rating in the Portfolio Grader.
Arrival (NASDAQ:ARVL) is an electric van startup that appears to be on the verge of bankruptcy.
The company warned investors in November that it may not have enough cash to keep its business going.
It also announced that it was pulling out of the U.K. market where it’s headquartered and where its first EVs were to be delivered.
Instead, the company will restructure to focus on the U.S. market and produce vehicles at its factory in Charlotte, North Carolina.
On top of that, Nasdaq issued a delisting warning to the company, saying it would be removed from the Nasdaq exchange if it can’t get its stock price over $1 and keep it there for a month. ARVL stock hasn’t been above $1 since mid-September.
Not surprisingly, founder Denis Sverdlov is getting the boot. The company announced that Sverdlov will become the company’s chairman while relinquishing the CEO job to Peter Cuneo.
Cuneo was at the helm of Marvel before it was purchased by Disney (NYSE:DIS). Cuneo was also CEO of the SPAC company CIIG Merger Corp., which brought Arrival public in 2021.
There’s way too much uncertainty in Arrival to consider buying, even at 30 cents per share. ARVL has an “F” rating in the Portfolio Grader.
R1 RCM (RCM)
R1 RCM (NASDAQ:RCM) is a financial company that works with hospitals, health systems and physician groups. It helps manage the revenue cycle for its clients for coding, billing, follow-up and debt collection.
While healthcare will continue to be in demand, a challenging economy may make getting paid for health services more challenging.
Inflation and a drop in discretionary income will stretch household dollars. People who are living paycheck to paycheck may be less able to pay medical bills.
Third-quarter earnings were also a shock. Revenue of $496 million came up short of analysts’ expectations of $523.71 million. And while experts expected EPS of 9 cents a share, RCM came back with a devastating loss of 7 cents per share.
That report helped send RCM stock down by 60% in just a matter of days – from more than $17 on Nov. 2 to just $8.50 on Nov. 8. On the year, R1 RCM stock is down by 68%.
RCM stock has an “F” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in META. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.