The holiday season is a great time for consumers. Stores are putting their best foot forward to entice buyers for the holiday shopping season. Many companies need a solid fourth quarter to make their numbers for the year. However, not all consumer discretionary stocks are good choices.
There are many factors that can pull consumer discretionary stocks down to an “F” rating in the Portfolio Grader. Those are the names you need to sell now.
You can find consumer discretionary stocks in various industries, from retail to leisure, travel or entertainment.
The U.S. economy is growing at a nice clip, but high inflation and elevated interest rates are giving some consumers pause. So, you must be careful when considering consumer discretionary stocks because they can dip quickly when consumer sentiment turns sour.
The names on this list are already suffering through such sentiment. Avoid these stocks in November.
ChargePoint (CHPT)
ChargePoint (NYSE:CHPT) is a technology company that makes, sells and operates charging stations for electric vehicles, but the bloom is already off this rose. Shares that used to trade for more than $40 are now about $2.50.
The company has more than 4,000 commercial and fleet customers and has delivered more than 87 million charging sessions. But the company still isn’t turning a profit. Losses in the last quarter topped $125.3 million, an increase from a loss of $92.7 million a year ago.
Investors are betting against ChargePoint as well. Short interest stands at nearly 28%, up from 22.65% less than two weeks ago.
CHPT stock is down 73% this year. It gets an “F” rating in the Portfolio Grader.
Mullen Automotive (MULN)
I’m not a fan of Mullen Automotive (NASDAQ:MULN) stock. I’ve said more than once that Mullen is an awful automotive stock. The price keeps dropping with no end in sight, even as Mullen keeps approving reverse stock splits to try to maintain Nasdaq compliance.
Mullen already completed a 1-for-25 reverse split in May and then did a 1-for-9 reverse stock split in August. Now, the company’s recommending to shareholders that it split the stock again, with proposals of either 1-for-2 or 1-for-100.
Honestly, it just needs to stop. With all the splits, selling and issuing new shares, Mullen has increased its shares from 2.3 million in June 2022 to 184.2 million in June 2023 and failing to use it wisely. It can’t, because it’s burning through all that cash to sustain operating losses.
MULN stock is down more than 96% this year. It gets an “F” rating in the Portfolio Grader.
Chewy (CHWY)
Chewy (NYSE:CHWY) is an e-commerce company specializing in pet food and pet products. If you want food, pet toys, a new dog bed or any other accessory, Chewy will deliver it straight to your door.
Sounds great, right? And during the Covid-19 pandemic when pet ownership flew through the roof, Chewy was a big winner. But it’s not now.
Earnings in the second quarter included net income of $18.9 million, down from $22.3 million a year ago. Earnings of 4 cents per share were down 20% from a year ago.
Analysts are taking note. Barclays analyst Trevor Young cut his price target on CHWY stock from $28 to $20. Goldman Sachs analyst Eric Sheridan cut his price target from $50 to $45.
CHWY stock is down 43% this year. It gets an “F” rating in the Portfolio Grader.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) makes hydrogen fuel cells used to power forklifts, drones and material handling equipment.
The fuel cells are a green solution to power generation because they use hydrogen and oxygen to produce electricity while emitting only water vapor as a byproduct.
It would be a great solution to global warming and the reliance on oil and gas if the hydrogen fuel cell business was profitable, but Plug Power hasn’t found a way to make it so.
The company is touting what it predicts as rapid growth, saying it will generate $1.2 billion in sales this year and increase that to $6 billion by 2027. It also projects growth margins to rise to 32% in 2027 and as high as 35% in 2030. That would be a neat trick, considering the company’s margins are currently in the red by nearly 27%.
Plug Power talks a good game but has failed so far to back it up, so I’m skeptical of the company’s latest forecasts.
PLUG stock is down 53% this year, getting an “F” rating in the Portfolio Grader.
Paramount Global (PARA)
Paramount Global (NASDAQ:PARA) is the parent company of Paramount Studios, the streaming service Paramount Plus, and television networks including CBS, Comedy Central, Nickelodeon and MTV.
Unfortunately, that means Paramount will be a big loser in the current actors’ strike, which is now over 100 days and shows no sign of ending.
The strike means that it will be a long time before the company’s TV networks, stations, and movie studios will be able to put out new content. It’s also notable that Paramount cut its dividend from 24 cents per share to 5 cents per share earlier this year.
The company’s third-quarter earnings included revenue of $7.13 billion, up 3% from a year ago, and earnings per share of 36 cents, up from 21 cents in the third quarter of 2022.
PARA stock is down 36% this year and gets an “F” rating in the Portfolio Grader.
Esports Entertainment Group (GMBL)
Esports Entertainment Group (NASDAQ:GMBL) is trying to make a name for itself in the growing world of esports. The company hosts online tournaments and leagues and uses both augmented reality and virtual reality in its platform.
But despite the rise in popularity, Esports Entertainment isn’t taking hold. It’s tanking badly.
The company has a market cap of only $4 million and the stock price is down to 6 cents, falling 99% this year. And that’s even considering the company executed a 1-for-100 reverse stock split in February.
Revenue for the full 2023 fiscal year (ending June 30) was only $23 million, down from $58.4 million the previous year. The only thing that makes that better was that the company’s net loss of $32.3 million was lower than the $102.2 million it lost in fiscal 2022.
This stock is more slaughter than sport. Stay away. GMBL stock has an “F” rating in the Portfolio Grader.
Hawaiian Holdings (HA)
Hawaiian Holdings (NASDAQ:HA) is the parent company of Hawaiian Airlines, which is the largest airline based in Hawaii. The airline is the main component of the company’s business, offering both domestic and international flights.
Hawaiian Airlines connects the state with cities in the United States, Asia, Australia, and New Zealand.
Worldwide airlines suffered during the Covid-19 pandemic because people couldn’t fly. And while most of them have returned to profitability, Hawaiian Holdings has not, as Asia has been slower than other regions to reopen its doors.
The airline also suffered from a lack of travel in August after wildfires in West Maui.
Revenue in the third quarter was down 1.8% from a year ago, resulting in a net loss of $48.7 million, or a loss of 94 cents per share.
There are many other better airline stocks to buy. HA stock is down 61% this year and has an “F” rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
