7 Stocks It May Be Time To Take Profits On

Posted on Tuesday, October 20th, 2020 by MarketBeat Staff
7 Stocks It May Be Time To Take Profits OnShould you or shouldn’t you? Many investors are wondering if it’s time to take some profit. With so much uncertainty in the market, there can be a temptation to take your profits and run. That may or may not be a good strategy. It’s true there are some speculative stocks that are going up on nothing but faith, trust, and pixie dust. But there are other stocks that may still be good buys despite continuing to grow.

Since the sell-off caused by the novel coronavirus and subsequent locking down of large portions of the economy, the stock market has recovered nearly all of its losses. The Federal Reserve has done its part by pledging to keep interest rates low for as long as it takes. New housing starts are up. Unemployment is coming down. There seems to be a lot of fuel for market bulls.

Still, if you’ve been holding one of the stocks in this presentation, it may be time for you to take some of the profits you’ve made. Many of the stocks in this presentation are being downgraded by analysts. And that means that there is likely to be downward pressure on the stock price.

#1 - Beyond Meat (NASDAQ:BYND)

Beyond Meat logo

Beyond Meat (NASDAQ:BYND) has seen its stock rise as much as 157% in 2020. The manufacturer of plant-based meat products has been a clear pandemic winner. The cost of beef skyrocketed as meat processing plants were shut down due to the virus. This helped the company overcome one of the key obstacles it faces, getting initial trials.

However, it seems that the run is over. BYND stock is down nearly 10% in the last two weeks. And the stock just received a rare double downgrade from Barclays analyst Benjamin Theure, which effectively turned the stock from a buy to a sell.

The stock currently has 9 sell rating and 8 hold ratings to go with only 4 buy ratings. And with a price target of $119.30, analysts believe the stock may fall by over 33% in the next 12 months. At issue is the company’s push into the foodservice space. Analysts are concerned that this sector may not recover as robustly as expected in 2021.

In its last quarter, Beyond Meat reported higher year-over-year (YOY) revenue but shrinking YOY earnings. This pattern of growing revenue with shrinking profits has been a broad concern of analysts.

About Beyond Meat
Beyond Meat, Inc engages in the provision of plant-based meats. Its products include ready-to-cook meat under the brands The Beyond Burger and Beyond Sausage; and frozen meat namely Beyond Chicken Strips and Beyond Beef Crumbles. The company was founded by Ethan Walden Brown and Brent Taylor in 2009 and is headquartered in El Segundo, CA.

Current Price: $112.68
Consensus Rating: Hold
Ratings Breakdown: 3 Buy Ratings, 9 Hold Ratings, 7 Sell Ratings.
Consensus Price Target: $121.44 (7.8% Upside)



#2 - Zoom (NASDAQ:ZM)

Zoom Video Communications logo

“Zoom” has become a verb during the pandemic as work, school, and social gatherings have made Zoom Communications (NASDAQ:ZM) an essential service. And the stock shows it. ZM stock is up over 700% for the year. However, the stock now has what Jim Cramer describes as a “nosebleed valuation,” which may be a good signal to avoid turning your gain into a loss.

Analysts seem to agree. The stock has a consensus rating of hold, but its 12-month price target suggests that stock may drop nearly 25%. At the same time, it’s fair to say that you can’t apply a fair valuation to Zoom with a 300% growth forecast. However, analysts are starting to factor in the availability of a vaccine. Even if that takes the better part of 2021 to be widely available, getting the most vulnerable population vaccinated would be a potential headwind on Zoom’s meteoric growth.

Zoom is not going away, and there is still a bullish case to be made. But it could be a good example of where pigs get fat, but hogs get slaughtered. There’s no problem with taking some of these profits now. 

About Zoom Video Communications
Zoom Video Communications, Inc engages in the provision of video-first communications platform. The firm offers meetings, chat, rooms and workspaces, phone systems, video webinars, marketplace, and developer platform products. It serves the education, finance, government, and healthcare industries. Its platform helps people to connect through voice, chat, content sharing, and face-to-face video experiences.Read More 

Current Price: $284.14
Consensus Rating: Hold
Ratings Breakdown: 12 Buy Ratings, 12 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $400.65 (41.0% Upside)



#3 - Cloudflare (NYSE:NET)

Cloudflare logo

Another tech stock that is looking a little toppy is Cloudflare (NYSE:NET). Cloudflare is making noise because of its network-as-a-service (NaaS) program, Cloudflare One, which offers cloud-based security, performance, and control through a single user interface.

Cloud stocks have been among the largest movers this year, and with good reason. Companies are becoming increasingly remote. And that means access to the cloud is imperative. Cloudflare continues to enjoy a consensus buy rating. However, the price target shows a potential downside of nearly 28% from the stock’s current level at around $58.

The concern seems to be if Cloudflare can continue to record the meteoric growth it’s been enjoying. It had a 77% growth margin in the first quarter of this year. However, if the company’s growth “slows down” to a level around 25x sales, the current consensus price target would be justified. Cloudflare reports earnings in early November, which may give investors a better picture of the company’s growth prospects.

About Cloudflare
CloudFlare, Inc operates a cloud platform that delivers a range of network services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and Internet of Things (IoT) devices.Read More 

Current Price: $132.58
Consensus Rating: Buy
Ratings Breakdown: 16 Buy Ratings, 5 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $111.08 (16.2% Downside)



#4 - Amwell (NYSE:AMWL)

American Well logo

Telehealth has been another big mover in 2020. There are many good plays in this sector, and Amwell (NYSE: AMWL), formerly known as American Well, has been making some noise in the space. Amwell is similar to Teladoc Health (NYSE: TDOC) in that it is a health-care platform that remotely (via the internet) connects patients with doctors. Right now, the company exists as the lone pure-play in the sector.

AMWL stock went public in mid-September with an IPO price of $18.  With a share price of nearly $34 per share, those investors have done quite well. But this may be a case of too far, too fast. The stock has grown nearly 100% before it’s ever had a chance to show investors anything.

One concern is that analysts are all over the map on Amwell stock. While some analysts remain bullish, others are suggesting a large move downward. There’s little doubt that a potential surge in new Covid-19 cases may be a bullish catalyst. But Amwell is one company in a sector that continues to grow. It seems like some prudence is in order.

About American Well
American Well Corporation operates as a telehealth company that enables digital delivery of care for healthcare. Its application offers urgent care; pediatrics; therapy; menopause nutrition; menopause counseling; telestroke; population health management; telepsychiatry; pregnancy and postpartum care; pregnancy and postpartum therapy; breastfeed support; and menopause care.Read More 

Current Price: $11.16
Consensus Rating: Hold
Ratings Breakdown: 6 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $23.25 (108.3% Upside)



#5 - GrubHub (NYSE:GRUB)

Just Eat Takeaway.com logo

GrubHub (NYSE:GRUB) has seen its stock price increase 78% in 2020. The online food delivery service has been an essential service not only for consumers but for restaurants who needed a lifeline to their customers.

Analysts are exercising a firm “hold” rating on the stock with 24 out of 29 analysts giving the stock a hold rating. However, three out of the other five analysts give the stock a sell rating. And the stock’s 12-month price target is forecasting a downside of over 35%.

There are two reasons for this. The first is that while GrubHub was, and remains, well-positioned for the global pandemic, it’s not a moat. And there is a lot of competition that is already in the space and not much of an obstacle for other companies to enter.

Plus, call it “Covid fatigue” but analysts are looking to the future and are skeptical that the company’s growth is sustainable in a post-Covid environment. While that may still be a way away, the market tends to be forward-looking, which suggests profit-taking may be the way to go.

About Just Eat Takeaway.com
Just Eat Takeaway.com N.V. operates an online food delivery marketplace. The company focuses on connecting consumers and restaurants through its platforms. It serves in the United Kingdom, Germany, Canada, the Netherlands, Australia, Austria, Belgium, Bulgaria, Denmark, France, Ireland, Israel, Italy, Luxembourg, New Zealand, Norway, Poland, Portugal, Romania, Spain, and Switzerland, as well as through partnerships in Colombia and Brazil.Read More 

Current Price: $17.20
Consensus Rating: Buy
Ratings Breakdown: 5 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $69.50 (304.1% Upside)



#6 - Gannett Media (NYSE:GCI)

Gannett logo

Gannett Media (NYSE:GCI) is the owner of USA Today. Like many stocks, shares of GCI dropped dramatically at the onset of the Covid-19 pandemic. But unlike other stocks, the stock hasn’t come back. The issue is advertising, or rather the lack of it. When the company should have been able to flourish from an increase in internet traffic, the company was losing revenue from advertisers.

Despite taking many steps to shore up its balance sheet, the company still finds itself staring at a huge net loss. And even with the stock trading at just $1.50, that appears to be high for analysts. At this time, only one analyst still offers an opinion on GCI stock, and they have the stock as a Sell.

Still, the stock has managed an 85% gain since the onset of the pandemic. Nevertheless, if you’re one of the investors who hopped on board that train, now may be the time to jump off before you find yourself carrying a ticket to nowhere.

About Gannett
Gannett Media Corp. provided media and marketing solutions. The company was headquartered in McLean, VA.

Current Price: $6.85
Consensus Rating: Sell
Ratings Breakdown: 0 Buy Ratings, 0 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: N/A



#7 - Signet Jewelers (NYSE:SIG)

Signet Jewelers logo

The last stock we’re putting on this list is Signet Jewelers (NYSE:SIG). The world’s largest retailer of diamond jewelry has been a surprisingly strong performer. It’s up 25% for the year and over 300% since the onset of the Covid-19 pandemic.

The big problem for Signet is that it relies heavily on its brick-and-mortar presence in malls. And we don’t have to emphasize what a troublesome area that is. Of the five analysts that cover the stock, four give it a sell rating. And the consensus price target of $13.75 means the stock could drop over 40% from its current level.

Beyond its brick-and-mortar presence, Signet faces a problem as many couples delay marriages due to Covid-19 restrictions. The company is pushing a “Path to Brilliance” initiative that will assuredly address the company’s weak omnichannel capabilities. But with such a personal purchase, it’s hard to see many people completely going to an e-commerce model.

About Signet Jewelers
Signet Jewelers Ltd. engages in the retail of diamond jewelry. It operates through the following business segments: North America, International, and Others. The North America segment operates jewelry stores in malls, mall-based kiosks, and off-mall locations throughout the U.S. and Canada. The International sells primarily in the UK and Ireland under the H.Read More 

Current Price: $81.17
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $91.00 (12.1% Upside)

 

I don’t want to leave you thinking that taking profits is a market timing strategy. That typically doesn’t work well, even for experienced investors. It’s important to understand that most publicly traded companies aren’t really sweating the presidential election outcome. In fact, in most cases, they feel like you do. That is, they’ll be glad when it’s all over.

The key to making a profit at this time is looking at the bigger picture and seeing if this is a stock that you’ll regret not having sold in six months. I use that timeframe because the election may cause a significant change to our tax policy. Specifically, capital gains rates could be going up. And that makes a decent argument for locking in some of those gains at a lower tax rate before the end of the year.

Warren Buffett is one of the most unapologetic buy-and-hold investors. But even the Oracle of Omaha has engaged in some high profile selling. And if you own one of the stocks in this presentation, it may be time for you to do some selling.

12 Marijuana Stocks to Buy Now

There are now more than 50 publicly-traded companies operating in the cannabis industry. Most of these companies aren't directly growing and selling marijuana themselves, but they do stand to benefit greatly as more states legalize the sale and possession of marijuana. Some of these marijuana stocks are media companies. Others are privately studying the medical uses of marijuana. Yet others are providing tools and software for marijuana growers. As more cannabis companies file IPOs and enter the stock market, it will become increasingly difficult for investors to identify which marijuana stocks will truly benefit from the cannabis boom.

Our subscribers have begun digging through these companies, checking out their financials, business models and long-term growth prospects. They know that some "marijuana stocks" are just empty shell companies that deserve to be penny stocks, but they also recognize there are some legitimate and growing companies that truly stand to benefit from the green rush. As a group, they have added 10 different cannabis stocks to their watchlists and are actively investing in them. More than 1,400 MarketBeat subscribers are now following our top-trending cannabis company.

This slide show lists the 12 pot stocks that MarketBeat subscribers are have added to their watchlists and are actively monitoring.

View the "12 Marijuana Stocks to Buy Now" Here.





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