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Protect your portfolio: 3 stocks to sell in 2023

Despite the recent rally in equities, it looks like investors will have to endure the volatility – and rising interest rates – a bit longer. This means it’s time for you to consider which stocks to sell.

After a tough year in 2022, you can’t blame investors for having a bit of “irrational exuberance” to start the year. Many stocks benefited from the “January effect”. This perceived phenomenon occurs when stock prices rise sharply in January after being sold off in December.

With the market rising, you might be tempted to deviate from your strategy and watch certain risky stocks on your watch list. It would be a mistake. Interest rates will continue to rise as the Federal Reserve hopes to see a “significant decline” in inflation later this year.

So that means investors will have to wait a bit longer and it might be time to find some stocks to sell in your portfolio. Remember that selling a stock in many cases simply means that the performance of the stock is likely to underperform the market as a whole.

When market conditions improve, these stocks may be candidates for recovery. But for now, it’s time to say goodbye to these three actions.

DOCUMENTDocuSign $65.01
RBLXRoblox $37.90
MOAltria Group $46.42

DocuSign (DOCU)

Source: various photographs / Shutterstock.com

DocuSign (NASDAQ:DOCUMENT) the stock is up 14% since the start of the year. Some of these gains are explained by the company’s December earnings report. The company beat on both the top and bottom results. The latter was something they hadn’t done in three quarters.

In fact, the company reported positive earnings for the first time in fiscal year 2022. Over the next five years, DocuSign is expected to post double-digit revenue and profit growth. However, in the last quarter, profits were down 91% year over year, while revenue was up 18%.

The biggest gains came after the company announced two new sales teams. The creation of a marketing and growth unit in particular seemed to boost DOCU stock. This unit is based on the idea that DocuSign needs to find different business avenues to increase both revenue and profit. It can’t come a moment too soon since the the housing market is still at half mast.

The consensus price target for DOCU stock is around 2% below its current price. If the company manages to find new sources of income, it will have time to grab shares on the way up. But in the current market environment, there are better options.

Roblox (RBLX)

Roblox IPO

Source: Miguel Lagoa / Shutterstock.com

After dropping more than 30% in 2022, Roblox (NYSE:RBLX) the stock is up 35% in 2023. It looks like some investors are clinging to the company’s growing daily active user count.

It’s also fair to say that the biggest increase in RBLX stock came after Metaplatforms (NASDAQ:META) generated earnings above expectations on February 2.

The thought is that it gives the metaverse theme a boost in the arm. However, one of the hallmarks of Meta Platforms’ earnings call was its lack of focus on the metaverse, and perhaps investors are realizing this as well. RBLX is down 5% this week.

By putting Roblox on a list of stocks for sale, I’m going to keep it even simpler. The company continues to increase its income but is not profitable. It’s generating negative earnings per share that’s even weaker than analysts expected, and that’s should not be profitable over the next five years. Until the company figures out how to turn the tide, there are better tech stocks to consider.

Altria (MO)

Altria office sign in Virginia capital city tobacco closeup by road street

Source: Kristi Blokhin / Shutterstock.com

Unlike the first two stocks for sale on this list, Altria Group (NYSE:MO) did not benefit from the January effect which boosted many stocks. However, MO stock has been rising since its earnings report. The company beat on the bottom line and, more importantly, announced a share buyback program.

Share buybacks increase a company’s earnings per share. And it will help ensure that Altria can continue to pay a dividend, which is one of the best reasons to own MO shares. But a bigger problem is that Altria is seeing its revenue increase due to rising prices, even as volume declines.

It’s a problem Altria continues to grapple with as tobacco products continue to fall out of favor. If Altria had real pricing power, volume would increase regardless of the higher price. If that doesn’t turn around, dividend growth, which is currently at an unsustainable 117% over the past three years, will slow, making MO stocks less attractive.

As of the date of publication, Chris Markoch had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Chris Markoch is a freelance financial writer who has covered the market for over five years. He has been writing for InvestorPlace since 2019.


Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
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