Some stocks just can’t catch a break.
Shares of many blue-chips are now languishing in the doldrums with no catalysts or momentum to carry them higher. This is largely due to poor management of the companies behind the stocks. Also, it can be due to negative investor sentiment, sector rotation, and economic forces. Whatever the reasons, some stocks seem doomed and have missed this year’s market rally entirely.
But in these cases, the best move investors can make is cut their losses and sell a losing position. Or better yet, avoid troubled companies and their stocks altogether. Let’s delve into three doomed blue-chip stocks to dump in December.
The Trade Desk (TTD)
The Trade Desk (NASDAQ:TTD) lost a quarter of their share value immediately after the issuance of its most recent financial results.
TTD stock plunged 25% as management issued fourth-quarter revenue guidance that fell far short of Wall Street expectations. At one point, the stock was down 30% as company executives held their earnings call with analysts and media. The Trade Desk forecast revenue in the current fourth quarter of $580 million. This falls below the $610 million expected by analysts.
Executives said that the advertising market was hurt by strikes this fall in both the U.S. auto sector and entertainment industry. Months-long strikes by the United Auto Workers union and Hollywood actors and writers were only recently settled, noted management. The company helps companies shift advertising dollars from traditional television to streaming markets, a sector that remains challenged.
Lost in the near hysteria over its guidance was The Trade Desk’s Q3 financial results beating analysts’ forecasts. TTD stock has recovered a bit but is still down 12% in the last month.
Chevron (CVX)
Slumping oil prices are largely to blame for the decline in Chevron’s (NYSE:CVX) fortunes. The U.S. oil major has produced substandard financial results .
Further, its share price slid 18% lower this year as the price of West Texas Intermediate (WTI) crude oil fell. It positioned at $72 a barrel from more than $90 earlier in the year. The decline in 2023 is a sharp reversal of fortune for Chevron and its stockholders. In fact, both enjoyed the record profits generated in 2022 when oil prices were above $100 per barrel.
Beyond the price of crude, Chevron is also dealing with a major acquisition. In late October, Chevron announced plans to purchase rival Hess Corp. (NYSE:HES) for $53 billion in an all-stock deal. The acquisition is valued at $60 billion. And, this includes some Hess debt that Chevron agreed to shift over to its balance sheet. While analysts acknowledge that the two oil producers have complimentary businesses, some have questioned the need for the Hess purchase.
Plus, Chevron now has to spend most of the next 12 to 18 months running the deal through regulatory approvals. And, that is going to be a big distraction.
Texas Instruments (TXN)
Now for a microchip and semiconductor stock that hasn’t performed well this year. Shares of Texas Instruments (NASDAQ:TXN) are down 10% over the last 12 months. The company’s microchips and semiconductors can be found in products ranging from automobiles to consumer electronics.
The company best known for making handheld calculators is struggling to find its niche in the red hot chip sector. TXN stock declined 5% after the company’s most recent earnings print. Specifically, most of the damage was done by weak revenue guidance provided for the current fourth quarter of 2023.
True, Texas Instruments reported Q3 earnings per share (EPS) of $1.85, better than the consensus estimate of $1.82. Yet, it also offered lackluster guidance for the final quarter of the year. The company expects revenue of $3.93 billion to $4.27 billion, which was below the analysts’ forecast of $4.50 billion.
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.
