April is a great time to invest in the stock market, but only if you know where to find the best stocks. Conversely, you need to be able to identify F-rated stocks to sell in April if you’re going to keep your portfolio out of the red.
This is no time to leave money on the table. Since 1945, April has averaged an average return in the market of 1.6%. That may not sound like a lot, but it ties December for the best-performing month of the year on average.
While there are some great companies out there for your investments, the Portfolio Grader can also identify stocks that represent weak companies that you should avoid at all costs.
While the names on this list represent a variety of sectors, they have some common threads. These companies are plagued by poor decisions and performance, weak earnings, a lack of growth and weak analyst sentiment.
If you’re holding any of these companies, it’s time to protect your capital, improve your portfolio and rebalance it into stocks that give you a better chance for success.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID) shares saw a spike last month when it entered into a subscription agreement with the Public Investment Fund’s Ayar Third Investment Company in Saudi Arabia. The deal calls for Lucid to provide 10,000 Series A convertible preferred shares in exchange for a $1 billion investment.
But the novelty of that deal is already fading or perhaps investors are realizing how much their shares are being diluted. The preferred shares represent 278.15 million shares of Lucid common stock.
Either way, Lucid stock has already returned most of its recent gains and is again on a downward slope. LCID only produced 6,000 vehicles in 2023 and badly needs a strong 2024 to regain relevance.
Revenue in the fourth quarter of 2023 was $157.1 million, down from $257.7 million a year ago. The company reported a loss of $736.8 million for the quarter and $3.1 billion for the full year.
LCID stock is down 35% in 2024 and gets an “F” rating in the Portfolio Grader.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is an alternative energy producer. The company makes a battery that uses hydrogen and oxygen to produce electricity.
The only byproduct is water vapor, making it an appealing option for businesses and communities that want to lower their carbon footprint.
But while Plug Power seems great in theory, the reality hasn’t measured up. Hydrogen fuel cells haven’t been profitable yet for the company, and Plug announced a cost-savings plan to trim expenses by $75 million. The company is also banking on a $1.6 billion loan facility that it’s hoping to secure with the U.S. government to help it maintain liquidity.
The company brought in revenue of $891 million for the fourth quarter, up 27% from a year ago. But losses increased to $2.30 per share from $1.25 per share.
PLUG stock is down 28% in 2024. It gets an “F” rating in the Portfolio Grader.
Fisker (FSRN)
Fisker (OTCMTKS:FSRN) is another electric vehicle stock that is actually in much worse shape than Lucid Group.
The company used to be listed on the New York Stock Exchange under the ticker “FSR” but the exchange suspended trading, citing an “abnormally low” stock price.
The delisting will require Fisker to offer to repurchase its 2026 unsecured 2.5% convertible notes and default on its 2025 senior secured notes.
The default would mean that holders of the 2025 notes should receive all note payments immediately. But Fisker also disclosed that it doesn’t have the money or credit line to pay those debts.
Fisker was also the subject of a TechCrunch report indicating that the company misplaced and temporarily lost track of customer funds worth millions of dollars.
Revenue in the fourth quarter was $200.1 million with a net loss of $463.6 million. FSRN stock is down 98% since its delisting and gets an “F” rating in the Portfolio Grader.
AMC Entertainment Holdings (AMC)
AMC Entertainment Holdings (NYSE:AMC) operates 900 movie theaters worldwide with a total of 10,000 screens. But a weakened movie market has hampered recently the company, thanks to the rise of streaming services and the writers’ strike that hit Hollywood last year.
And it’s not as if this company was strong to start with. AMC took a beating during the Covid-19 pandemic, and it’s best known over the last few years as a nostalgic meme stock more than anything.
Nostalgia certainly has its place, but not when you’re an investor. You can’t hold on to a stock just because the company gave you warm fuzzy feelings when you were a kid.
Revenue in the fourth quarter was $1.1 billion, up from $990 million a year ago. AMC also reduced its losses from $287.7 million and $2.64 per share in Q4 2022 to $182 million and 83 cents per share in the most recent quarter.
AMC is still saddled with a massive amount of debt ($4.6 billion). It announced plans to sell $250 million in shares to pay some of that off, but that also resulted in share dilution that sent AMC down 15% last week.
In all, AMC is down 50% in 2024. It gets an “F” rating in the Portfolio Grader.
GameStop (GME)
Speaking of meme stocks and nostalgia, let’s talk about GameStop (NYSE:GME). GameStop is the original meme stock that was the subject of a correctly titled film, Dumb Money, in 2023.
Dumb Money documented the 2021 GME short squeeze that was fueled by social media and retail investors who saw an opportunity to squeeze hedge fund investment firms that had been shorting GameStop stock in anticipation of continued drops.
The squeeze resulted in massive gains for GME stock, but they only lasted for days before the entire house of cards collapsed.
But that’s history. Investing should be about the present and anticipating the future, and both of those look weak for GameStop shares.
Fourth-quarter revenue was $1.79 billion, down from $2.22 billion in the same quarter a year ago. Earnings were up slightly, to $63.1 million and 21 cents per share from $48.2 million and 16 cents per share.
Wedbush Securities analyst Michael Pachter lowered his price target for GME from $6 to $5 following the earnings report. Even that may be optimistic.
GameStop stock is down 35% in 2024 and gets an “F” rating in the Portfolio Grader.
Mullen Automotive (MULN)
I’ve written a few times in the last several months about Mullen Automotive (NASDAQ:MULN) in an attempt to warn investors away from this EV stock.
It’s not like I enjoy pointing out the company’s flaws. But I think it’s important to sound a loud and clear alert that this is a company to avoid.
Consider that Mullen only delivered 396 vehicles in the fourth quarter of 2023. Or that the stock dropped by more than 99% in the last 12 months.
Mullen has gone to incredible lengths to try to keep on a major index and avoid Fisker’s fate. But in doing so the company executed three reverse stock splits in 2023, including a 1-for-100 split in December.
And even then, I’m not convinced that MULN will remain more than $1 per share for much longer.
Mullen’s only hope aside from a fourth reverse split is that its pivot to commercial EVs will give it an opportunity to avoid total collapse. It’s not a bet I’m willing to make.
MULN stock is down 68% in 2024 and continues to carry a well-deserved “F” in the Portfolio Grader.
Hertz Global Holdings (HTZ)
Hertz Global Holdings (NASDAQ:HTZ) is a vehicle rental company that operates as Hertz, Dollar Rent a Car, Firefly Car Rental and Thrifty Car Rental.
Hertz has been plagued by bad decisions that should leave investors wary.
Following the Covid-19 lockdowns that crippled the auto rental industry, Hertz bet big on EVs, hoping that the fleet would be appealing to customers. But when Tesla (NASDAQ:TSLA) cut prices on its cars across the board and other EV makers followed suit, Hertz was left with a high-priced fleet with a much weaker resale value.
Now Hertz is looking at cutting its EV fleet from 60,000 to 20,000, taking a $245 million charge in depreciation and repairs and recording its biggest quarterly loss ($348 million) since the Covid-19 pandemic.
Now that CEO Stephen Scherr stepped down, investors may be tempted to give Hertz another chance to get it right. But I don’t recommend it. HTZ stock is down 26% in 2024 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.
