As we approach the end of 2023, it’s crucial for investors to carefully evaluate their stock portfolios and make strategic decisions for the year ahead. The financial landscape is constantly evolving, with factors such as inflation, interest rates, and the possibility of a recession influencing market volatility. While not all stocks should be abandoned, it may be wise to divest from positions that are particularly vulnerable to further price declines. In this article, we will explore seven stocks that may be worth selling before 2024, analyzing their current performance, future prospects, and potential risks.
Airbnb (NASDAQ:ABNB), the popular lodging marketplace operator, has experienced significant growth this year, with its shares up by more than 48% year-to-date. However, recent concerns about the travel industry’s future have cast doubt on its long-term prospects. If you bought ABNB stock when worries about a “travel bust” peaked in December 2022, it might be opportune to take your profits and exit. Additionally, regulatory crackdowns on short-term rentals, such as those seen in New York City, could lead to stricter regulations in other major cities, further impacting Airbnb’s operations. While some may argue that ABNB’s valuation of 32.8 times forward earnings is not excessive, analysts at KeyBanc suggest that the company’s growth is slowing down and future results may fall short of expectations. Furthermore, company insiders have been reducing their personal positions in Airbnb, indicating a lack of confidence. Considering these factors, it may be wise to follow suit and divest from ABNB stock.
Carvana (NYSE:CVNA), an online used car retailer, has been a topic of skepticism due to its valuation not aligning with its underlying fundamentals. Despite being one of the top stocks to sell, short interest in CVNA has fallen from 64% of float in May to around 44% of float today. While this suggests decreasing bearish sentiment, it also indicates diminishing chances for future short squeezes, making CVNA less appealing as a short-squeeze play. Moreover, an unfavorable environment for used car sales raises concerns about Carvana’s ability to report improved results in the coming quarters. These factors contribute to the overall sentiment that it may be time to sell Carvana stock.
GameStop (NYSE:GME), once a “meme king” and the center of attention in the stock market, has seen its stock hitting new multi-year lows recently. Although some may have believed that improved fundamentals could sustain GME’s valuation, sell-side analysts like Michael Pachter and Nick McKay have a more dire forecast for the company. They suggest that GameStop’s recent appointment of Chairman Ryan Cohen as CEO ensures the company’s demise. Cohen’s inexperience in running a physical retailer, coupled with GameStop’s failure to penetrate the e-commerce market, could lead to its “game over moment” as digital downloads replace physical game sales. While GameStop’s stock may not plummet to zero immediately, the overall trajectory is likely to be downward. Therefore, it may be wise to sell GME stock.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID), an electric vehicle startup, has faced bearish sentiments for some time now. Despite being cheaper compared to twelve months ago, the company’s struggle to build a fanbase and deliver a significant number of vehicles raises concerns about its long-term success. The opening of its first overseas auto plant in Saudi Arabia is a positive development, but without success in the domestic market, international triumphs become questionable. With underwhelming results and a dependence on dilutive capital raises, Lucid Group’s stock may continue to experience downward pressure. As a result, selling LCID stock may be a prudent move.
Moderna (NASDAQ:MRNA), a biotech company known for its Covid-19 vaccines, experienced a significant surge in stock price during the pandemic. However, with the majority of the public already vaccinated and the sales of booster shots limited, Moderna’s sales have declined considerably. The company’s heavy spending on the development of other mRNA-based vaccines and therapies, coupled with insider selling by members of its board and C-suite, indicates a lack of confidence in its future prospects. If you still hold MRNA stock, it may be wise to consider selling.
Peloton Interactive (PTON)
Peloton Interactive (NASDAQ:PTON), a connected fitness company, has experienced a significant decline in its stock price from its once-hot status. While recent quarters have shown signs of stabilization, sell-side forecasts still predict negative earnings for the next three fiscal years. Despite the recent partnership with Lululemon Athletica (NASDAQ:LULU), doubts remain about Peloton’s ability to improve its situation. While the downside risk may be minimal, the lack of significant upside potential suggests it may be time to sell or stay away from PTON stock.
Qualcomm (NASDAQ:QCOM), a semiconductor company, has faced steady declines in its stock price compared to other chip stocks. Although Apple (NASDAQ:AAPL) extended its agreement to buy 5G modem chips from Qualcomm, weak demand for mobile device chips industry-wide could outweigh this positive news. Additionally, the loss of China’s Huawei as a major customer further impacts Qualcomm’s future prospects. While the company’s restructuring plan and expansion into high-growth areas may mitigate these challenges, it is likely that the market is waiting for Qualcomm’s core business to bounce back before investing in its shares. Given the current circumstances, it may be wise to avoid holding QCOM stock.
As we approach the end of 2023, it is essential for investors to reassess their stock portfolios and make strategic decisions for the year ahead. The stocks mentioned in this article, including Airbnb, Carvana, GameStop, Lucid Group, Moderna, Peloton Interactive, and Qualcomm, all have unique factors that suggest selling or avoiding their stocks. Market conditions, company-specific challenges, and future prospects all contribute to the recommendations made in this article. However, it is crucial to conduct thorough research and consult with a financial advisor before making any investment decisions.