Let’s face it – there are some stocks to sell that just have no hope left.
Hope is a great thing. If it wasn’t for hope there wouldn’t be any such thing as investing. Putting your hard-earned money into an equity is essentially an act of hope and faith, anchored in the knowledge you’ve acquired along the way about what makes a good stock. But
Hope fades for a variety of reasons. When it does– or ideally, before – then it’s time for investors to make some hard decisions about which stocks to sell from their portfolio.
One tool that you have at your disposal is my Portfolio Grader. It’s a free tool that ranks stocks based on a variety of factors, including earnings reports, recent performance, momentum and analyst sentiment. Stocks get a grade from “A” to “F” – and it’s the latter category that includes stocks to sell because they’re no turnaround in sight.
Here are seven failing stocks to sell that earn that sorry distinction now.
Exela Technologies (XELA)
If you still have hope in Exela Technologies (NASDAQ:XELA) stock, then you’re sorely mistaken. Shares of this technology stock are down nearly 100% over the last 12 months, making this one of the stocks to sell while there’s still someone to buy them.
In fact, I recently wrote that it’s more likely that Excel would drop to zero than return to its former highs.
That’s a pretty safe bet. XELA stock is selling for roughly 6 cents per share. The company’s reported operating losses of $58 million over the last year. When you add in its debt services expenses, Exela lost $298 million over the last year.
It has roughly $1.16 billion in outstanding debt – which is way too much for a company with a market capitalization of just $7 million.
The company is an outsourced service provider that deals in low-tech, labor-intensive back-office services. It recently disclosed that it skipped out on interest payments for some of its debt, which could be an indication that it’s considering a Chapter 11 bankruptcy reorganization.
XELA stock has an “F” rating in the Portfolio Grader.
Chinese electric vehicle company Xpeng (NYSE:XPEV) is lightyears away from where bulls predicted it would land, which makes it one of the stocks to sell rathr than wait for a comeback.
Shares are down almost 75% in the last 12 months, falling to less than $10.
The company is gamely trying to keep up with its Chinese competitors by cutting its way to profitability. Responding to price cuts by other automakers, Xpeng recently cut the price of its P7 sedan to $31,015, which was a 13% reduction. Its P5 and G3i models were cut from 10% to 13%.
But Wall Street is seeing through the sleight of hand and isn’t happy that the company will be bringing in less profit per vehicle. Investors obviously aren’t convinced the lower prices will lead to more sales – shares of XPEV stock fell by more than 6% after the price cut.
Xpeng hopes to deliver 20,000 vehicles this year. But as long as inflation (and costs) remain high and prices are low, it will take a long time for XPEV to become as profitable as other vehicle companies.
XPEV stock has an “F” rating in the Portfolio Grader.
Ault Alliance (AULT)
Ault Alliance (NYSEAMERICAN:AULT) used to be known as BitNile Holdings, but other than that it’s hard to pin down exactly what this diversified company does.
Ault has a data center that mines Bitcoin (CCC:BTC-USD). But it also buys undervalued, and at times struggling, businesses. It currently has its fingers in oil exploration, crane services, defense and aerospace, industrial, automotive, pharmaceuticals, consumer electronics, hotel operations and even textiles.
Now you can add electric vehicles to the mix. EV company Mullen Automotive (NASDAQ:MULN) recently disclosed that Ault owned 71.96 million shares of Mullen, or more than 4%, making it the company’s largest shareholder.
Mullen is definitely struggling – its shares are down more than 50% in the last year and currently are trading for about 25 cents per share.
AULT stock is down 85% over the last year, and why it has an “F” rating in the Portfolio Grader.
I confess that it was probably pretty easy to hope for good things with fuboTV (NYSE:FUBO) stock just a few quarters ago. Between cable cutting and the Covid-19 pandemic shutdowns, it seemed obvious that streaming entertainment services would skyrocket. Companies like FUBO seemed to be in the catbird seat.
But it hasn’t worked out that way. Shares of FUBO stock are down more than 75% over the last year, making it one of the stocks to sell that continue to disappoint.
The company specializes in live streaming of sports events. The business model was predicated on a marriage of live sports and in-game wagering. It was in the process of creating its own sportsbook so it could profit from that in addition to its streaming subscriptions and advertising revenue.
But weak numbers caused FUBO to pull the plug on its sportsbook late last year. And now fuboTV shareholders are stuck with a business that spends 95% of its overall revenue on broadcasting rights – and leaving no money left over for things like salaries, sales and marketing. FUBO lost $150 million in the third quarter alone.
FUBO stock has an “F” rating in the Portfolio Grader.
You may wish for ContextLogic (NASDAQ:WISH) stock to rebound and become relevant again, but as I wrote recently, no amount of wishing will make this particular hope come true.
ContextLogic operates the Wish.com shopping platform, which connects users to merchants in Europe, North America and South America. But unlike other more well-known ecommerce platforms, Wish specializes in offering inexpensive products.
But buyer beware – as Business Insider writes in a review, the platform features products that “seem untested and suspect” and seemingly “takes a gimmicky approach to commerce.”
Shares were more than $30 in January 2021, but two years later you can buy WISH stock for about 70 cents. The stock is down 69% over the last 12 months.
WISH stock has an “F” rating in the Portfolio Grader.
ReShape Lifesciences (RSLS)
ReShape Lifesciences (NASDAQ:RSLS) is in the weight-loss business – and that’s a lucrative place to be, considering two out of three U.S. adults are considered either overweight or obese, according to Harvard University research.
ReShape provides Lap-Band and ReShape Vest bariatric procedures for patients who are looking to take a surgical approach to weight loss. It also offers virtual health coaching to patients.
But the company’s struggling, badly. Revenue in the third quarter was $2.8 million, which was down 25% from a year ago. The company reported a net loss of $11.8 million, or 60 cents per share.
And that’s just the tip of the iceberg – RSLS consistently misses on both revenue and EPS over the last year. It’s no wonder the stock is down 92% over the last year.
RSLS stock has an “F” rating in the Portfolio Grader.
Lyft (NASDAQ:LYFT) is a well-known ride-sharing company that operates in an increasingly competitive space. Unfortunately for investors, Lyft seems to be on the losing end of that equation. Lyft has only managed to gather a 29% of the ridesharing market.
Earnings for the fourth quarter weren’t pretty. The company missed earnings per share estimates for the quarter, posting a loss of 74 cents per share when analysts were expecting a loss of only 12 cents. Lyft reported weak guidance for the first quarter of 2023, with revenue of $975 million. Wall Street is expecting more like $1.09 billion.
In addition to rideshares, Lyft offers Lyft Delivery as a service for its drivers to accept deliveries of less than 50 pounds from stores, restaurants, warehouses, pharmacies and car dealerships. But the company doesn’t offer a dedicated food delivery service like Uber (NYSE:UBER) and its Uber Eats app.
LYFT stock is down 72% in the last year, and has an “F” rating in the Portfolio Grader.
On the date of publication, Louis Navellier held XPEV. He did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
The biedexmarkets.com Research Staff member primarily responsible for this article held BTC. The research member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.