The S&P 500 is riding a hot streak having recently closed above 5,000 for the first time ever, marking a new all-time high for the benchmark stock market index. So far this year, the S&P 500, which is comprised of the 500 largest publicly traded companies in America, is up 5%, building on a 24% gain achieved in 2023.
The index has closed at a record high on more than 10 occasions through six weeks of the year as the rally in equities continues. These milestones are significant as the S&P 500 is widely considered the main benchmark for U.S. stocks and represents the largest swath of equities in the country.
Yet, the gains in the S&P 500 continue to be lopsided. Big tech stocks are the main driver of the index. Many well-known stocks continue to lag behind as their share price slides lower. Here is Exit now! Three S&P 500 stocks to sell in February.
Coca-Cola (KO)
Coca-Cola (NYSE:KO) just reported mixed fourth-quarter financial results due to a sales volume decline in North America. It was an uncharacteristic result for the beverage giant, which typically issues pristine earnings. For Q4 2023, Coke reported earnings per share (EPS) of 49 cents, which matched Wall Street forecasts. Revenue totaled $10.85 billion U.S., which topped expectations of $10.68 billion. Sales were up 7% from a year earlier.
However, in its earnings release, Coca-Cola said that higher prices helped it to largely overcome a 1% sales volume decline in the U.S., Canada and Mexico. The company said sales of its water, sports drinks and coffee all fell in North America during the quarter. Looking ahead, Coca-Cola said that it expects foreign exchange rates will weigh on both its earnings and revenue for all of this year. The print and guidance have sparked concern among investors, sending KO stock down 2%.
Coca-Cola’s stock is flat over the past 12 months (down 0.72%). Given the potential for ongoing problems at the company, now looks like an opportune time to exit a position in KO stock.
Humana (HUM)
Shares of Humana (NYSE:HUM) dived 16% after the American health insurer reported a surprise loss for Q4 2023 and issued weak guidance for the year ahead. Humana shocked Wall Street by announcing a loss of 11 cents a share on revenue of $25.60 billion. Analysts had forecast a profit of 89 cents a share on revenue of $25.50 billion. The shock loss was blamed on an increase in Medicare Advantage medical costs, as well as higher inpatient utilization rates.
Sadly, the forward guidance provided by Humana wasn’t any better. The company said it sees earnings of $16 a share for all of 2024, which is significantly below the $29 a share that analysts had penciled in for the company.
Humana has invested heavily in the government-funded Medicare Advantage program that offers health benefits to senior citizens. Those benefits have skyrocketed, putting pressure on Humana’s finances. HUM shares are down 23% on the year, making it an S&P 500 stock to sell in February.
AT&T (T)
Things seem to be going from bad to worse at AT&T (NYSE:T). The telecommunications giant recently reported weaker-than-expected Q4 2023 financial results and issued soft forward guidance, causing its stock to decline 4%. The Texas-based telecommunications company announced EPS of 54 cents, which missed consensus forecasts of 56 cents. Revenue came in at $32 billion, which was slightly above Wall Street expectations of $31.46 billion.
A deeper dive into AT&T’s numbers reveals some troubling trends. Revenue in the company’s wireless phone unit rose 3.9% year-over-year. However, sales in its wireline (landline phone) segment fell 10.3% from a year ago during Q4 2023. Going forward, AT&T forecast EPS of $2.15 to $2.25 for the current first quarter of 2024, which was below Wall Street estimates of $2.46. A legacy telecom company, T stock has been in long-term decline, having fallen 27% over the last five years. Definitely time to sell.
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.
