Chair of the Federal Reserve, Jerome Powell, has spoken, and Wall Street won’t like it. The Fed has decided to hold off on cutting interest rates, citing discouraging developments in the fight against inflation. Hence, we’re now looking at higher for longer interest rates, which makes it opportune to consider shedding Nasdaq stocks to avoid.
The Nasdaq closed in a sea of red on Tuesday, wrapping up the stock market’s worst month this year. Many had expected such an outcome following the hot inflation and jobs market report. Moreover, you have investors in show-me mode with generative AI stocks, which led the market to robust gains last year. Hence, it’s best to be circumspect and offload Nasdaq stocks to avoid likely burning more shareholder value ahead.
Beyond Meat (BYND)
Beyond Meat (NASDAQ:BYND) operates a plant-based meat company that’s fallen out of favor with both its customers and investors. Demand has stagnated following years of declining demand after a flash-in-the-pan moment driven by dietary fads. Despite the initiatives the plant-based industry players took, their efforts haven’t borne fruit. According to a report, only 15% of U.S. households bought plant-based products last year, compared to a 19% increase in 2022.
BYND has been a poster child for the plant-based meat market but is now a shadow of its former self. It is confronting numerous obstacles this year, with sales firmly in the negative, and incredibly worrying bottom-line metrics. With year-over-year sales and net income margins at a negative 18% and 98%, respectively, it’s not hard to see why its stock shed 50% last year. In the past month alone, it’s down 18%. According to Tipranks’ analysts, BYND stock will likely dip another 10%. Moreover, the lowest price target for BYND stock points to another 50% drop from current levels.
Nano Dimension (NNDM)
Nano Dimension (NASDAQ:NNDM) is an Israel-based 3D printing company looking to bring its disruptive solutions to multiple industries. Although it’s now a penny stock, it once traded at a price that would impress even the biggest market leaders. NNDM stock trading on the Nasdaq back in March 2016, reaching an all-time high price of $88.90 on March 22. In contrast, you can now pick up NNDM stock for a measly $2.45 at the time of writing, 97% lower than its all-time highs.
Over the years, NNDM has grown at a healthy pace, with its five-year revenue growth at 155%. However, its stock hasn’t followed, with NNDM stock down more than 66% during the same period. We’ve seen growth rates slow recently, and NNDM is looking to position itself as an AI player to keep its shareholders invested.
The 3D printing market has enormous potential, and we are still at the genesis stages of understanding how the technology develops. However, that’s not what the markets are looking for and what it will be anytime soon.
Canopy Growth (CGC)
Canopy Growth (NASDAQ:CGC) is a forerunner in the cannabis space that’s witnessed a tremendous uptick in price of late. Reports of reclassifying marijuana as a less dangerous drug in the U.S. have led to a strong rally in CGC stock and its peers. Consequently, CGC stock trades at a remarkably bloated valuation, trading over 4.66 times forward sales estimates. Wall-Street forecasts a concerning 67% downside based on average estimates with a “moderate sell” rating.
The current rally is based on pure speculation around the legalization of marijuana at the federal level. CGC has little to offer its investors otherwise, mostly missing top-line and bottom-line estimates over the past several quarters. Its losses are piling, with its free cash flows at a negative $71.8 million on a trailing twelve-month basis. Moreover, it recently sold off its corporate headquarters while placing a key operating segment under creditor protection — need I say more?
On the date of publication, Muslim Farooque 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
