S&P 500   4,471.37 (+0.75%)
DOW   35,294.76 (+1.09%)
QQQ   368.94 (+0.63%)
AAPL   144.84 (+0.75%)
MSFT   304.21 (+0.48%)
FB   324.76 (-1.15%)
GOOGL   2,827.36 (+0.15%)
TSLA   843.03 (+3.02%)
AMZN   3,409.02 (+3.31%)
NVDA   218.62 (+0.53%)
BABA   168.00 (+0.73%)
NIO   37.71 (+3.94%)
CGC   13.35 (-2.55%)
GE   104.41 (+1.63%)
MU   67.68 (-0.18%)
AMD   112.12 (+0.12%)
T   25.70 (+0.31%)
F   15.70 (+1.62%)
ACB   7.03 (-3.17%)
DIS   176.46 (+1.18%)
PFE   41.49 (-0.43%)
BA   217.04 (-0.18%)
AMC   40.74 (+1.67%)
S&P 500   4,471.37 (+0.75%)
DOW   35,294.76 (+1.09%)
QQQ   368.94 (+0.63%)
AAPL   144.84 (+0.75%)
MSFT   304.21 (+0.48%)
FB   324.76 (-1.15%)
GOOGL   2,827.36 (+0.15%)
TSLA   843.03 (+3.02%)
AMZN   3,409.02 (+3.31%)
NVDA   218.62 (+0.53%)
BABA   168.00 (+0.73%)
NIO   37.71 (+3.94%)
CGC   13.35 (-2.55%)
GE   104.41 (+1.63%)
MU   67.68 (-0.18%)
AMD   112.12 (+0.12%)
T   25.70 (+0.31%)
F   15.70 (+1.62%)
ACB   7.03 (-3.17%)
DIS   176.46 (+1.18%)
PFE   41.49 (-0.43%)
BA   217.04 (-0.18%)
AMC   40.74 (+1.67%)
S&P 500   4,471.37 (+0.75%)
DOW   35,294.76 (+1.09%)
QQQ   368.94 (+0.63%)
AAPL   144.84 (+0.75%)
MSFT   304.21 (+0.48%)
FB   324.76 (-1.15%)
GOOGL   2,827.36 (+0.15%)
TSLA   843.03 (+3.02%)
AMZN   3,409.02 (+3.31%)
NVDA   218.62 (+0.53%)
BABA   168.00 (+0.73%)
NIO   37.71 (+3.94%)
CGC   13.35 (-2.55%)
GE   104.41 (+1.63%)
MU   67.68 (-0.18%)
AMD   112.12 (+0.12%)
T   25.70 (+0.31%)
F   15.70 (+1.62%)
ACB   7.03 (-3.17%)
DIS   176.46 (+1.18%)
PFE   41.49 (-0.43%)
BA   217.04 (-0.18%)
AMC   40.74 (+1.67%)
S&P 500   4,471.37 (+0.75%)
DOW   35,294.76 (+1.09%)
QQQ   368.94 (+0.63%)
AAPL   144.84 (+0.75%)
MSFT   304.21 (+0.48%)
FB   324.76 (-1.15%)
GOOGL   2,827.36 (+0.15%)
TSLA   843.03 (+3.02%)
AMZN   3,409.02 (+3.31%)
NVDA   218.62 (+0.53%)
BABA   168.00 (+0.73%)
NIO   37.71 (+3.94%)
CGC   13.35 (-2.55%)
GE   104.41 (+1.63%)
MU   67.68 (-0.18%)
AMD   112.12 (+0.12%)
T   25.70 (+0.31%)
F   15.70 (+1.62%)
ACB   7.03 (-3.17%)
DIS   176.46 (+1.18%)
PFE   41.49 (-0.43%)
BA   217.04 (-0.18%)
AMC   40.74 (+1.67%)

7 Stocks to Sell Before the New Year

Posted on Saturday, November 30th, 2019 by MarketBeat Staff
7 Stocks to Sell Before the New YearWe’re officially in the holiday season, which means it’s time to get our portfolios set for the new year. And for many investors, 2021 can’t get here fast enough. Don’t get me wrong. Overall, being invested in stocks has been a wise move. But it hasn’t been without its ups and downs. For investors to profit in this market, they have had to have conviction.

But having conviction also means knowing when it’s time to sell. One of the hardest things to do in life, as well as in investing, is to let go of an idea that simply isn’t working. There are a lot of story stocks out there. And while those stories may turn out to be more than fairy tales, in the long run, it doesn’t mean you have to pay tomorrow’s prices today.

Or, it could simply be a good time to take some profits. A new administration in Washington D.C. will bring a different, and most likely less favorable, tax policy regarding capital gains. It may be advantageous to take some of your gains now.

Whatever your motivation may be, we’ve put together a list of seven stocks that you should consider selling before the new year.

#1 - Netflix (NASDAQ:NFLX)

Netflix logo

Let’s start out with a pick that may sound contrarian, but it’s really not. Binge-watching isn’t really my jam. There are so many other things to do, let alone watch. However, I’m not the target audience for Netflix (NASDAQ:NFLX). Nonetheless, I have a subscription, and my account gets charged every month like clockwork.

Ah, recurring revenue. The golden egg is being laid by one of the market’s golden geese. Recurring revenue is important for Netflix in particular because the company has to pay to create its original content. Prior to the pandemic, investors saw that as a headwind for the stock. But now Netflix has received a second wind.

All that being said, NFLX stock is down nearly 13% from its year-to-date highs around $550. In fact, at three separate times this year, that stock price has served as a point of resistance. In each case, the stock found support around the $460 level. It appears Netflix is heading in this direction. But I have another concern.

In January, Netflix loses The Office. Can one program make a difference?  According to an InMyArea Research survey conducted earlier in 2020, more than 18 million U.S. subscribers watch the show. And 53% of those viewers are in the critical 18-44 age demographic. Of those surveyed, 10% said they would cancel their subscription once The Office closed its doors on Netflix. That would be a hit of about $935 million. That may not seem significant for a company that is on pace to generate nearly $25 billion in revenue in FY2020. But the survey was conducted largely prior to the pandemic. As consumers have had a chance to test drive additional options, they may decide to leave as well.

All I’m saying is there are both technical and fundamental reasons for taking some profits on Netflix and waiting on the next leg up.

About Netflix
Netflix, Inc operates as a streaming entertainment service company. The firm provides subscription service streaming movies and television episodes over the Internet and sending DVDs by mail. It operates through the following segments: Domestic Streaming, International Streaming and Domestic DVD. The Domestic Streaming segment derives revenues from monthly membership fees for services consisting of streaming content to its members in the United States.Read More 

Current Price: $628.29
Consensus Rating: Buy
Ratings Breakdown: 30 Buy Ratings, 7 Hold Ratings, 3 Sell Ratings.
Consensus Price Target: $642.38 (2.2% Upside)


#2 - Peloton (NASDAQ:PTON)

Peloton Interactive logo

The next stock on the list has been another pandemic winner. Peloton (NASDAQ:PTON) went from being the butt of jokes to having the last laugh. Millions of Americans moved their fitness routines into their homes, and Peloton bikes became a beneficiary.

Of course, that brings up the recurring revenue theme again. Because once consumers have laid out the money for one of the company’s bikes, they’re likely to use it.

Like Netflix, shares of PTON stock are down approximately 21% since their year-to-date high in October. One of the “sell the news” items weighing on the stock are reports that consumers are canceling orders due to long shipping lead times.

The shipping problem will likely ease as a Covid-19 vaccine becomes more widely available. However, that is also likely to bring fitness enthusiasts back to the gym. Plus, Peloton doesn’t have a moat, and lower-priced (although perhaps not with the same quality) competitors are proliferating the home gym market.

Either way, it seems unlikely that Peloton will get the same holiday boost that it received last year. And that means if you haven’t already sold some PTON stock, it may be time to do so.

About Peloton Interactive
Peloton Interactive, Inc provides interactive fitness products in North America and internationally. It offers connected fitness products, such as the Peloton Bike and the Peloton Tread, which include touchscreen that streams live and on-demand classes. The company also provides connected fitness subscriptions for multiple household users, and access to all live and on-demand classes, as well as Peloton Digital app for connected fitness subscribers to provide access to its classes.Read More 

Current Price: $85.11
Consensus Rating: Buy
Ratings Breakdown: 25 Buy Ratings, 5 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $132.42 (55.6% Upside)


#3 - GrubHub (NYSE:GRUB)

Just Eat Takeaway.com logo

You might be noting a theme here. And you’ll either think I’m insane, or maybe I’m onto something. GrubHub (NYSE:GRUB) has been a pandemic winner because food delivery became an essential service.

But here again, we find a stock that’s down 18% in the last month. In fairness, GRUB stock is approaching a price that provided support back in September. And with mitigation measures being heightened in many states, the stock may be poised for a Santa Claus rally.

But there are some fundamental problems that investors shouldn’t ignore. Yes, GrubHub has picked up exciting partnerships with Dunkin Brands (NASDAQ:DNKN), Pizza Hut, and Taco Bell - both of which are affiliated with Yum! Brands (NYSE:YUM). However, the company is likely to increase its marketing spend, which could squeeze already tight margins. Plus, the market for food delivery is highly competitive. This is a market going through a wave of consolidation, which always makes valuing stocks tricky.

GrubHub did receive a catalyst when the California ballot initiative forced companies like DoorDash to classify its drivers as employees failed. But that hasn’t had much effect on the stock, which suggests investors were already factoring that outcome into the stock’s price.

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: $16.06
Consensus Rating: Hold
Ratings Breakdown: 5 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $69.50 (332.8% Upside)


#4 - Nikola (NASDAQ:NKLA)

Nikola logo

Electric vehicle (EV) stocks have been red hot in 2020. And there’s a good reason for that. With the possible exception of 5G, there’s no market in which the United States is trying to achieve dominance in the EV market. The sector took steps forward, even with the benign neglect of the Trump administration. Now it has a champion on Pennsylvania Avenue.

However, not all EV stocks get to go to the moon. And for me, Nikola (NASDAQ:NKLA) fits that category. I’m generally not a fan of companies that have a whiff of accounting shenanigans. And Nikola has had that. But there’s a more fundamental reason to not invest in the stock. The company’s fortunes depend on a $2 billion partnership with General Motors (NYSE:GM).

But in a recent interview on Jim Cramer’s Mad Money, Nikola would not confirm that a deal is forthcoming. And the company would not squelch concerns that the company’s founder Trevor Milton will sell all or part of his 91.6 million shares when a lock-up period ends on December 1.

About Nikola
Nikola Corp. engages in the provision of zero-emissions transportation and infrastructure solutions. It designs and manufactures battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems and hydrogen fueling station infrastructure. The company was founded by Trevor Milton in 2015 and is headquartered in Phoenix, AZ.

Current Price: $11.16
Consensus Rating: Hold
Ratings Breakdown: 3 Buy Ratings, 6 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $18.13 (62.4% Upside)


#5 - GoPro (NASDAQ:GPRO)

GoPro logo

What do you get when you cross a product that has failed to capture market share with a tantalizing stock price? You get GoPro (NASDAQ:GPRO). This company has failed to gain traction with its core product offering and has recently taken to the subscriber model to capture recurring revenue.

The largest problem for GoPro is that smartphone technology has become so good that many consumers are using their mobile devices to take live-action video leaving little room for GoPro’s offerings.

I suppose professionals may quibble, but there are obviously not enough of those to drive revenue. Case in point, GoPro recently initiated a debt offering that would be an additional $100 million to the company’s $157 million in long-term debt. Coming off what was largely seen as a solid earnings report in September, this is not going over well with investors.

A recent 15% drop in the stock price still probably leaves the stock overvalued. The smart play is not to chase GPRO stock until there is a more compelling story concerning a return to sustained profitability.

About GoPro
GoPro, Inc engages in manufacturing and selling camera and camera accessories. The firm provides mountable and wearable cameras and accessories, which it refers to as capture devices. Its product brands include HERO9 Black, HERO8 Black, Max, HERO7 Black, HERO7 Silver, GoPro Plus, and GoPro App. The company was founded by Nicholas Woodman in 2002 and is headquartered in San Mateo, CA.

Current Price: $8.83
Consensus Rating: Sell
Ratings Breakdown: 0 Buy Ratings, 1 Hold Ratings, 2 Sell Ratings.
Consensus Price Target: $8.97 (1.5% Upside)


#6 - United Airlines (NASDAQ:UAL)

United Airlines logo

Airline stocks are drawing speculative buyers' attention with the “it’s Monday, so there must be another vaccine ready” market we’ve had in November. I’ll leave the coincidental timing of the vaccine announcements to people with a higher pay grade.

However, there’s no doubt that airlines must be breathing a sigh of relief. Through no fault of its own, this sector was devastated by the decline in air traffic. And while the sector has been coming back in fits and starts, the industry needs a vaccine badly.

The good news is when it does, air traffic should return, at least domestically. And that’s where I advise pumping the brakes just a bit on United Airlines (NASDAQ:UAL). Among the leading airline carriers, United has the most exposure to international flights. And that will probably be the last market segment to come back.

UAL stock has climbed 28% in the last month, and this seems like a case of too far too fast. It would seem like a good idea to wait on a better entry point.

About United Airlines
United Airlines Holdings, Inc is a holding company, which offers satellite based Wi-Fi, including on long-haul overseas routes. It transports people and cargo throughout North America and to destinations in Asia, Europe, Africa, the Pacific, the Middle East and Latin America. UAL, through United and its regional carriers.Read More 

Current Price: $48.00
Consensus Rating: Hold
Ratings Breakdown: 5 Buy Ratings, 6 Hold Ratings, 5 Sell Ratings.
Consensus Price Target: $56.75 (18.2% Upside)


#7 - AVIS Budget Group (NASDAQ:CAR)

Avis Budget Group logo

Another travel stock that has recently cracked its way into positive territory for 2020 is Avis Budget Group (NASDAQ:CAR). Once again, at the surface level, this seems like a smart play. After all, air traffic and rental cars go hand-in-hand. But it’s important not to get carried away with a sector that faces an existential threat.

Thus far, Avis has done a good job of cost-cutting to fend off a bankruptcy situation. But if the business doesn’t improve soon, investors may get impatient with accounting maneuvers being a substitute for actual revenue.

However, while Avis is not Hertz (NYSE: HTZ), the rental car industry faces a challenge from ride-hailing services. And it’s a battle that they were losing before the pandemic. The flight of urban commuters out of the cities and the possible shift to work-from-home for millions of Americans may change business travel's fundamental nature.

Simply put, ask yourself this question. Is there enough activity in the rental car sector to justify an over 100% increase in CAR stock in the last six months?

About Avis Budget Group
Avis Budget Group, Inc engages in the provision of vehicle sharing and rental services. It operates through the Americas and International segments. The Americas segment licenses the company's brands to third parties for vehicle rentals and ancillary products and services in North America, South America, Central America, and the Caribbean.Read More 

Current Price: $150.97
Consensus Rating: Hold
Ratings Breakdown: 2 Buy Ratings, 2 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $99.20 (34.3% Downside)

 

The emergence of several Covid-19 vaccines is creating one of the most important market catalysts, hope. And investors who are fueled by hope can outlast the harshest of bear forecasts. But now is a time when it’s important not to get caught up in irrational exuberance.

Overall, the market appears to be a little ahead of the actual economy. Some stocks are due to pull back. And whether you believe in technical analysis or not, some of the charts send the same message.

That means that it’s not unlikely that many stocks that got overheated in 2020 may come down to earth in 2021. And with many attractive stocks to choose from, it’s best to aim for quality stocks as you position yourself into the new year.

Many of the stocks in this presentation may have a bullish long-term story. But as the economy begins to reshape itself after one of the most disruptive years in our lifetimes, it’s important to make sure your portfolio is positioned in the right sectors.

12 Stocks Corporate Insiders are Abandoning

An insider trade occurs when a corporate executive (such as a CEO, CFO, or COO) has non-public information about a company buys or sells shares of that company's stock. Company insiders are required by law to regularly report their stock purchases and sales to the SEC.

Tracking a company's insider trades is a metric that can be used to identify the direction that the company's executives believe that the company is headed. If a number of insiders sell shares of their company, they may believe that the company will have weak future earnings and that the share price will decline in the near future.

For example, if Microsoft's CEO, CFO, and COO all recently sold shares of Microsoft stock, that would be an indication that there could be unreported news that may negatively affect Microsoft's stock price in the near future.

This slideshow lists the 12 companies that have had the highest levels of insider buying within the last 180 days.

View the "12 Stocks Corporate Insiders are Abandoning" Here.





Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.