Are you feeling good about the stock market? You should. The market continued to show strength in early 2024, which is all the more reason to rid your portfolio of F-rated stocks.
When the stock market’s this strong, it’s no time to consolidate your positions around bottom-dwellers at bargain prices. This is a time to capitalize on the market’s momentum and look for stocks that are already strong.
So far in 2024, the Dow Jones Industrial Average is up more than 2%, topping 38,000. The Nasdaq Composite and the S&P 500 are even better, showing year-to-date gains of more than 7%.
While tech stocks continue to lead the charge, several sectors (I’m looking at you, automotive) are decidedly weaker. And the bloom is definitely off the electric vehicle rose—several of our F-rated stocks to sell are squarely in that camp.
I suggest using the Portfolio Grader to find the best stocks to buy and the top stocks to sell in this market. By finding F-rated stocks with weak fundamentals, poor earnings performance, a lack of growth, and weak momentum, you can avoid the losers and take full advantage of the 2024 bull market.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID) is one of several electric vehicle-related F-rated stocks on this list. The EV company hasn’t taken off in the way that investors dreamed of when the company went public in July 2021.
Now approaching its third year as a publicly traded company, LCID stock is down 92% from those heady early days. The company struggles with production, delivering only 6,000 vehicles last year. Deliveries in the fourth quarter were down 32% on a year-over-year basis.
I admit the Lucid car looks great. I saw one on the highway a few days ago and I have no doubts that the owner appreciates his car. But as an investment, I can’t get behind Lucid stock when the market is already over-saturated with EVs and the industry in general is in a funk.
LCID stock is down 24% so far this year and gets an “F” rating in the Portfolio Grader.
Cara Therapeutics (CARA)
Cara Therapeutics (NASDAQ:CARA) is a Connecticut-based drugmaker that focuses on making therapies for people with chronic itchy skin, or pruritus.
It has an approved drug for patients undergoing hemodialysis, and has a drug in Phase 2/3 trials that potentially could be used to treat people with itches of the upper back.
But research and development can be expensive, and there’s no guarantee that the company or its investor will see it pay off. The company’s cash position dropped from $156.7 million at the end of 2022 to $100.8 million at the end of 2023.
Cara also reported a loss of $32.3 million in the fourth quarter, with revenue of only $3 million. Research and development expenses were $28.4 million.
CARA stock is down 91% in the last 12 months and now trades for less than $1 per share. It gets an “F” rating in the Portfolio Grader.
Mullen Automotive (MULN)
I am not a fan of Mullen Automotive (NASDAQ:MULN), the electric vehicle company that’s made a specialty by manipulating its stock price and diluting shares in a weak attempt to stay listed on the Nasdaq exchange.
Mullen did not one, not two, but three reverse stock splits in 2023, including a ridiculous 1-for-100 split in December. So while the stock price today is more than $6, you must also recognize that MULN is down 99.8% in the last 12 months.
And while the company’s earnings show some mild improvement (the fourth quarter was the best in the company’s history, with delivery of 231 vehicles) I don’t believe that the pivot to commercial EVs will be enough to turn around a truly horrendous company, which is why it’s one of the F-rated stocks to avoid.
At least, not in March 2024. MULN stock deserves every bit of its “F” rating in the Portfolio Grader.
Moderna (MRNA)
Moderna (NASDAQ:MRNA) is no Mullen Automotive. This company has a track record of success, but the stock is in a deep slump right now, making holding MRNA stock a questionable decision.
Moderna is best known for its mRNA vaccines, which are designed to teach cells to make harmless pieces of protein that belong to a specific virus to induce an immune response that combats a virus.
Modern used mRNA technology to create its Covid-19 vaccine, becoming one of the first companies to win approval from U.S. regulators to mass produce its treatment for millions of people.
That led to tremendous profits in 2021 and 2022 – but not so much since. Moderna stock faced some huge comparable numbers when reporting earnings in the last few quarters, and the company’s revenue and profit numbers are way down from a year ago.
Revenue in the fourth quarter was $2.79 billion, down from $4.85 billion a year ago. The company posted net income of $217 million and 57 cents per share, but that pales from a year ago when it posted income of $1.46 billion and $3.61 per share.
Moderna has other drugs in its pipeline, and this won’t be the last time you hear about the company. But MRNA stock doesn’t make sense as an investment in March 2024. The stock is down 33% in the last year and gets an “F” rating in the Portfolio Grader.
Fisker (FSR)
Electric vehicle company Fisker (NYSE:FSR) hasn’t split its stock as Mullen did. But it may need to.
The company announced in February that it received a notice from the New York Stock Exchange that its stock was below the $1 per share level for 30 consecutive days and out of compliance with NYSE rules.
The company also disclosed that it has “substantial doubt about its ability to continue as a going concern.” It’s seeking additional financing and says the 2024 model of the Fisker Ocean – its only current product – will be a key year for the company.
Revenue in the fourth quarter was $200.1 million with a net loss of $463.6 million.
Fisker is negotiating with original equipment manufacturers and trying to grow its dealership network. But the stock, now priced at roughly 50 cents per share, is a serious concern.
FSR stock is down 93% in the last 12 months and gets an “F” rating in the Portfolio Grader.
Realty Income (O)
Realty Income (NYSE:O) is a monthly dividend stock. The company is a real estate investment trust, or REIT, that owns more than 13,000 properties across nearly 90 industries. Realty Income has properties in all 50 U.S. states, Puerto Rico, the U.K., Spain, Italy, Ireland, France, Germany and Portugal.
The best thing about Realty Income is the dividend. With a yield of 4.4%, Realty Income has increased its dividend annually for the last 31 years. It’s a reliable payer for investors who want a consistent flow of income.
But there are issues here that give O stock an “F” rating in the Portfolio Grader. This has been a rough time for many REITs because inflated interest rates deeply cut profits. The benchmark interest rate in the U.S. today is at 5.5%, although financing a mortgage will be more than that.
The rate was close to zero just two years ago. So, borrowing money is much more expensive today than it was in 2022.
That’s why even though Realty Income recorded revenue of $1.07 million in the fourth quarter – up from $888.7 million a year ago – income actually fell from $227.3 million and 36 cents per share to $218.4 million and 30 cents per share.
O stock is down 19% in the last 12 months.
ChargePoint Holdings (CHPT)
ChargePoint Holdings (NYSE:CHPT) is another of the F-rated stocks directly to the electric vehicle industry. The company manufactures, owns and operates a network of charging stations designed to power EVs.
While the Biden administration’s infrastructure bill includes national investment in EV charging stations, ChargePoint is being left behind in the dust.
The company’s revenue in the fourth quarter fell from $152.8 million a year ago to just $115.8 million in Q4 2023. Much of that drop can be attributed to a fall-off in revenue from network charging systems, which dropped from $122.3 million a year ago to $74 million.
Overall, ChargePoint reported a net loss for the quarter of $94.9 million, up from a loss of $78.6 million a year ago. For the full year, ChargePoint lost $457.6 million.
That doesn’t give investors much confidence, which is why CHPT stock is down 81% in the last year and gets 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.
