7 stocks to sell in March before they crash and burn
While there’s something romantic about shooting an underrated company, a compensating narrative also exists, which brings us to the subject of stocks to sell. True, very few people enjoy discussing this topic (especially if you own the stocks mentioned). However, it is inevitable. At some point, you’re going to have to issue rejections.
That’s why I don’t always agree with professional athletes showing that no one believed in them, which then provided the fuel to succeed. Believe me, for every Tom Brady there are probably thousands of Tim Tebows. No disrespect to honest Mr. Tebow, but coaches and managers have to make tough decisions to win. So it is with stocks for sale. For the companies below, lackluster financial metrics and/or rough fundamentals combined with pessimistic analyst views make a near-term recovery unlikely. With that, here are the stocks for sale.
|BBBY||Bed bath and beyond||$0.82|
Basically, the Chinese electric vehicle manufacturer Xpeng (NYSE:XPEV) does not appear to be one of the stocks for sale. After all, industry advocates love to rave about how electric vehicles represent the future of transportation and mobility. However, the problem with Xpeng is that it is stuck in an extremely competitive field.
Notably, JPMorgan Chase could exit Xpeng, reducing its long position in XPEV. Moreover, the thoughtful action aligns with broader analyst skepticism of the electric vehicle maker. On a larger scale, experts note that demand in China’s EV market has also weakened, hurting Xpeng’s potential. Moreover, the company does not really benefit from exceptional financial results. More glaringly, its prior year operating and net margins are more than 30% below parity.
Finally, Wall Street analysts consider XPEV a consensus. Their average price target is $10.07, which is only less than 2% upside potential.
Bed Bath and Beyond (BBBY)
Once generating huge attention as meme stock, Bed bath and beyond (NASDAQ:BBBY) still maintains a cult. However, this sequel no longer matches the positive sentiment towards BBBY stocks. Since the start of the year, BBBY has suffered an alarming 66% haemorrhage in equity value. For the previous year, shares fell more than 96%. This is likely the signal that the beleaguered retailer is tokenizing one of the stocks to sell.
Another factor to consider is that because BBBY stock fell below $1, it broke a funding deal with an asset management company. Therefore, the ability of the underlying retailer to raise capital remains a serious concern. Regarding its financial profile, there is not much to say that has not been noticed by other analysts. Operationally, the company looks doomed, with revenue growth and negative profit margins. Plus, he has very little cash compared to debt.
Unsurprisingly, analysts view BBBY as a strong sell. I would just ignore his price target of $1.03 (implying 31% growth). The experts probably haven’t updated their spreadsheets.
Galactic Virgo (SPCE)
On the surface, Galactic Virgo (NYSE:SPCE) does not appear to be among the stocks for sale. In evidence, SPCE has gained more than 15% in stock value since the January open. More importantly, the spaceflight company represents a direct participant in the booming space economy. Over the next few decades, the space economy could reach a valuation of a trillion dollars or more.
Overall, though, it’s little comfort to longtime SPCE stakeholders. For example, over the past 365 days, stocks have fallen almost 59%. Since its public market debut (via a merger with a Special Purpose Acquisition Company or SPAC), Virgin Galactic has fallen 60%. Financially, the company is suffering from negative revenue growth and profit margins that have fallen into the abyss. It’s also hugely overpriced relative to sales, adding insult to injury.
As for Wall Street, analysts view SPCE as a consensus moderate sell. Moreover, their average price target sits at $3.93, implying a downside potential of 2.5%.
Without context, red fin (NASDAQ:RDFN) appears something other than one of the shares for sale. Since opening in January, RDFN has nearly doubled in market value. Moreover, with the Federal Reserve determined to fight stubbornly high inflation – despite continued worries in the banking sector – the real estate broker looks set for better days.
Unfortunately, over the one-year period, the RDFN gave away more than 57%. Additionally, the Fed’s hike in the benchmark interest rate will hurt affordability on the backend. In other words, even though the price may go down, the threshold for qualifying for a mortgage will go up. Another factor to take into account is the company’s generally dire financial situation. Most notably, the company’s operating and net margins fell an average of 14% below parity. Additionally, its Altman Z-Score of 0.87 reflects a struggling company.
As for the street, analysts see the RDFN as a consensus take. Moreover, their average price target sits at $7.51, implying more than 9% downside risk.
With the rise of artificial intelligence and machine learning, it is understandable that the market has turned to entities such as C3.ai (NYSE:AI). Considered a complete enterprise AI application development platform, C3.ai offers a myriad of turnkey solutions for companies looking to leverage the power of advanced digitization. Indeed, since the January open, AI stock has gained almost 125%.
One of the stocks for sale? I think no, might be the resounding answer. However, since its public market debut in late 2020, AI has sold over 79% of equity value. Therefore, in a longer-term framework, C3.ai suffers from a credibility crisis. In fairness, C3.ai enjoys an extremely cash-rich balance sheet. Thus, it could be argued that it will not go bankrupt anytime soon. However, it also won’t be profitable anytime soon if it doesn’t address its mounting operating losses.
Perhaps the most worrying aspect is that it is not generating much positive sentiment among analysts, who see it as a catch. Moreover, their average price target stands at $20.57, implying more than 17% downside risk.
A manufacturer of medical devices, Vapotherm (NYSE:VAPOR) has created the first heated and humidified therapeutic high-flow nasal cannula system. Although the company apparently has medical relevance, it’s been a tough year for VAPO stock. And it’s only getting worse, making it one of the stocks to sell. So, for example, shares have fallen more than 78% since the January open.
You thought that was bad? It’s even worse. Over the past year, VAPO has bled almost 96%. Trading hands at 60 cents a pop, Vapotherm needs a miracle to stay in the game. Financially, however, the outlook looks bleak. If VAPO represented a human patient, doctors might say there is nothing they can do. With an Altman Z-Score of 9.3 below break-even, Vapotherm is in considerable trouble. Operationally, the company’s three-year revenue growth rate is 1.1% below zero. Naturally, its operating and net margins are deeply below zero.
Unsurprisingly, analysts rate VAPO as a consensus moderate sell. Their price target has dropped to an average of 50 cents, implying an 18% downside risk.
Beyond Meat (BYND)
As a concept I went to really appreciate what companies like Beyond meat (NASDAQ:BYND) do regarding vegetable meat. Typically, when the option to go meatless comes up, I sometimes participate (probably about a third of the time). However, my personal feelings cannot stand in the way of the facts. And the thing is, BYND struggled.
Of course, you can highlight its performance of almost 24% since the beginning of the year. However, compared to the previous year, BYND fell by 70%. Financially, the circumstances do not look attractive for Beyond Meat. Most notably, its Altman Z-Score of 0.59 below zero indicates a company in deep trouble. Additionally, its revenue growth fell 2.2% below break-even. As for profitability, forget it. Whether gross, operating or net margins, each of these measures is less than zero. I’m sorry but of virtually all objective tax measures, BYND represents one of the stocks to sell.
Finally, analysts consider BYND a moderate sell. Their average price target sits at $11.50, implying a downside risk of almost 25%.
As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.