Seeking out great stocks to buy is important, but identifying quality investments is only half the battle. Many would say it’s just as essential for investors to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, figuring out which stocks to trim or get rid of is essential for proper portfolio maintenance.
Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week.
Palantir (PLTR)
Some data points from Palantir’s fourth-quarter results indicate that, despite businesses and governments’ increased embrace of AI in recent months, the company’s growth is slowing a great deal. In Q4, the company’s U.S. revenue increased just 1.7% versus the previous quarter to $302 million. And its overall top-line growth slowed to 18% year-over-year in Q4, down from 22% in Q3.
On a positive note (snicker), after nearly 20 years of existence, the company generated its first quarterly profit, as it reported a Q4 net income of $31 million or 1 cent per share. However, its operations still generated an $18 million loss, with its operating margin at a discouraging -4%.
Big Lots (BIG)
Shares in the big box retailer may be down by nearly 71% over the past 12 months. Its 10.82% dividend yield is still tempting some investors. However, with the company reporting a net loss of $7.30 per share and expected to stay in the red through 2024, it’s highly questionable whether BIG’s high rate of payout will continue for long.
Black Hills Corporation (BKH)
Natural gas producer Black Hills Corporation reset its growth outlook lower after reporting disappointing Q4 results, slashing its 2023 EPS view to $3.65-$3.85 from $4.00-$4.20. The revision was driven by a rapid shift in macroeconomic factors, including elevated natural gas price volatility and higher natural gas demand driven by winter storm Elliot in December 2022. With elevated natural gas price volatility, higher interest rates, and general inflationary pressures forecasted through 2024, Black Hills is only expected to grow earnings by 2% in 2024 and 4% in 2025.
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and then