If you’re holding onto your F-rated stocks, you’re playing a dangerous game. It doesn’t take a lot of time for a bad stock to do some serious damage to your portfolio. Doesn’t it make more sense to send those F-rated stocks packing?
While it’s fun to imagine the riches that can come by holding the right stocks, it’s also good to take a sobering look at how and why the wheels can fall off a stock. Whether the company has bad fundamentals, is in a declining industry or is failing to keep up with its competitors, the market’s reaction won’t be pretty.
It would be great if we could look into a crystal ball or find another mystical way to read the future. But there are no guarantees in investing, and the best we can do is make some measured assessments based on our experience, and use tools like the Portfolio Grader to help make those assessments a little easier.
The Portfolio Grader evaluates stocks on an “A” through “F” scale to help you separate the good stocks from the bad.
By looking at analyst sentiment, earnings performance, revenue growth, momentum and other factors, the Portfolio Grader takes the emotion out of investing and gives you an unbiased grade.
If you’ve not looked at your portfolio in a while, now’s the time. And if you’re holding F-rated stocks to sell, you may have some work to do.
Mullen Automotive (MULN)
Mullen Automotive (NASDAQ:MULN) is a perfect example of why the stock market can be a little tricky. You may be tempted to jump on Mullen after hearing the stock price is up more than 100% in just a week. You may be excited to hear that the stock hit a new record for trading volume.
Fear of missing out – FOMO – is real. Nobody wants to be left on the sidelines.
But with Mullen, there’s nothing to see here. That 100% rally means the stock price is still less than 25 cents per share. The stock is moving higher because Mullen announced a $25 million stock buyback program.
The company released guidance for producing 1,590 vehicles this year and 14,368 vehicles in 2024.
But investors have heard this before. Mullen has always been very active in putting out statements to draw attention.
I think it’s much more likely that MULN is headed for zero, and it deserves the “F” rating it gets from the Portfolio Grader.
Verizon (VZ)
I think Verizon (NYSE:VZ) is a major disappointment. I was as interested as anyone in the rollout of 5G telecommunications because I’ve long believed that the technology will be groundbreaking in so many ways.
But Verizon seems to have found a way to fumble the ball. While it’s spent billions of dollars to build its 5G network, the company hasn’t done enough to separate itself from its competitors.
Now the company has a debt of $186.2 billion, a huge hole it will have to pay off at some point. It makes me deeply concerned that Verizon’s dividend – currently at 7% — could be at risk.
VZ stock is down 5% in 2023 and has an “F” rating in the Portfolio Grader.
Hycroft Mining (HYMC)
Hycroft Mining (NASDAQ:HYMC) is an exploration-stage gold and silver mining company based in Denver.
Its biggest claim to fame is likely that meme stock AMC Entertainment (NYSE:AMC) took a 22% stake in the company to diversify.
That got a lot of attention from meme stock traders. But it doesn’t mean that Hycroft Mining is a good stock.
Hycroft is sitting on 9.6 million ounces of gold reserves and nearly 446 million ounces of silver reserves. But currently, it has no revenue coming in, and in the first quarter, it ran up expenses of $13.9 million.
It’s also a red flag for me that Hycroft has more debt ($137 million) than cash ($132 million). While it’s drilling in hopes of finding riches, there’s no telling when – or if – the company will be able to find anything.
HYMC stock is down 42% this year and has an “F” rating in the Portfolio Grader.
Dish Network (DISH)
Based in Colorado, Dish Network (NASDAQ:DISH) is a satellite television provider that’s discovering that satellite TV is very much a 20th-century idea. And that’s a problem when you’re looking for stocks in 2023.
That’s not to say that Dish is trying to stay relevant. It owns Sling TV, a streaming service with 2.1 million users. That may sound impressive until you realize that Sling TV lost more than 500,000 subscribers in the first quarter.
Dish Network also owns Boost Mobile, a wireless service provider with nearly 8 million customers. Dish Network built a 5G network available to more than 70% of the U.S. population.
Earnings in the first quarter told a troubling story. Revenue fell 8.6% from a year ago to $3.96 billion. Earnings per share of 35 cents fell by 48% from the previous year.
In addition to Sling TV losses in the subscriber base, Dish TV subscribers fell by 11% to 7.1 million.
DISH stock is down 51% this year and has an “F” rating in the Portfolio Grader.
Sono Motors (SEV)
Sono Motors (NASDAQ:SEV) is a motor vehicle company in transition. The company recently terminated its EV program, the Sion, which would have created solar-powered electric vehicles.
Now Sono is focused on the B2B side of the business – making and trying to sell solar panels to other vehicle manufacturers to make solar-powered buses, refrigerated vehicles, recreational vehicles and passenger vehicles.
The market reaction hasn’t been favorable. Sono Motors stock is down 67% to trade for more than 30 cents per share. It’s also facing a delisting notice from Nasdaq that it could be taken off the exchange if it doesn’t get its stock price up to $1 by mid-September.
In May, the Munich-based company applied to insolvency court in Germany, acknowledging the company is “over-indebted and faces impending illiquidity.”
It plans to restructure, but I say it’s time to close the door on SEV stock. It gets an “F” rating in the Portfolio Grader.
Airspan Networks (MIMO)
Airspan Networks (NYSEAMERICAN:MIMO) is a Florida-based telecommunications company that makes 4G and 5G hardware and software.
It provides various products that can be deployed indoors or outdoors to allow wireless signals to be transmitted to users.
The company was founded in 1992 and went public in August 2021 through a special purpose acquisition company merger with New Beginnings Acquisition.
In that merger, the company was valued at $700 million. Less than two years later, it has a market capitalization of just $12.1 million. That tells you all you need to know about Airspan’s recent history.
First-quarter earnings showed revenue of $24.7 million, down 34% from a year ago. The company also reported an EPS loss of 28 cents per share.
MIMO stock is down 87% this year, trading less than 20 cents per share. It has an “F” rating in the Portfolio Grader.
Victoria’s Secret (VSCO)
Headquartered in Ohio, Victoria’s Secret (NYSE:VSCO) is a women’s clothing brand specializing in lingerie, sleepwear and swimwear. It also operates the Pink lifestyle brand, which includes undergarments, beauty products, fanny packs and footwear.
Unfortunately for the iconic company, the stock price has been nothing to celebrate this year. Victoria’s Secret stock is down 47%, aided by a big miss in first-quarter earnings.
The company had already signaled in Q4 that first-quarter earnings would take a dip, but analysts were not prepared for how deep the slide would be. Revenue of $1.4 billion was down 5% from a year ago, but earnings per share of 28 cents was much worse than the 54-cent EPS that analysts expected.
Following the report, Victoria’s Secret issued updated 2023 guidance for net sales to be flat to down low-single digits.
VSCO stock has an “F” rating in the Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
