It might be time to start looking for stocks to ditch.
Stock markets continue to be volatile and plenty of well-known companies are seeing their share prices fall to new lows. Regardless of whether the declines are because of poor management, macroeconomic headwinds, growing competition, or negative investor sentiment, many once dominant stocks are struggling right now.
While it’s often advisable to buy the dip in a distressed stock, it’s also important for investors to know when to cut their losses. Sometimes you have to walk away from a stock whose prospects have darkened.
With the near-term outlook for markets complicated by a potential recession, investors may want to get out of poor performing stocks.
Here are three shaky stocks to ditch before June 2023.
| DIS | Walt Disney Co. | $88.29 |
| F | Ford Motor Co. | $12.09 |
| INTC | Intel | $29.00 |
Walt Disney Co. (DIS)
On the day of this writing, shares of Walt Disney Co. (NYSE:DIS) had slipped below $90 a share and were fast approaching a new 52-week low.
DIS stock continues to be in freefall despite interim CEO Bob Iger’s efforts to right the ship at the Mouse House. Iger has announced about 7,000 job cuts and scaled back the enormous spending on new content. He has also introduced a basic plan for Disney+ that now includes advertisements and no downloads.
Yet despite Iger’s best efforts, DIS stock continues to sink. The share price is now 55% below the peak it reached in March 2021 when people were still sheltering at home during the pandemic.
The continued decline in the stock is a bit of a head scratcher as many of Disney’s business lines, including its theme parks, cruise line, and theatrically released films are performing strongly.
The company remains embroiled in a political battle with Florida Governor Ron DeSantis, which could be weighing on the share price.
Regardless of the reasons, things with DIS stock are going from bad to worse. Best for investors to move on from Mickey and friends.
Ford Motor Co. (F)
Jim Farley, CEO of the Ford Motor Co. (NYSE:F), held an investor event on May 22 where he outlined his plans to profitably build millions of new electric vehicles while simultaneously growing the automaker’s traditional operations.
Judging by the performance of F stock, Farley needs to improve his powers of persuasion. F stock slumped in the days immediately following the event, adding to mounting losses for shareholders. In the past six months, Ford’s stock has declined nearly 20%.
Analysts just don’t seem to be convinced that Ford can go from manufacturing about 600,000 electric vehicle this year to making two million EVs by 2026. There are also concerns about the $50 billion Ford is spending to pivot towards making battery-powered cars, trucks and SUVs.
In this year’s first quarter, Ford’s electric vehicle operations lost $722 million, nearly twice as much as it lost a year earlier. Despite Farley’s best efforts, skeptics abound, making Ford a shaky stock to ditch before June 2023.
Intel (INTC)
Down 50% over the past five years, semiconductor and microchip company Intel (NASDAQ:INTC) is a value trap at this point.
The ongoing decline in INTC stock is especially disappointing given that the share prices of most other chipmakers are soaring right now. On May 25, Intel’s stock fell 6% as rival Nvidia’s stock skyrocketed 25% following a blockbuster earnings print.
Like Ford, Intel is trying to dramatically shift its business, moving to fabricate microchips and semiconductors in the U.S. for itself and other companies.
Also like Ford, Intel is spending heavily to transform its operations, including $20 billion to build two new chip factories in Arizona. However, the company has racked up financial losses, announcing at the end of April its biggest quarterly loss in company history.
Intel reported a stunning 133% annual reduction in its earnings per share. The company has since announced that it is reducing spending and laying off staff. On top of everything else, personal computer sales continue to slump worldwide, hurting demand for its PC chips.
Run don’t walk from INTC stock.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
