February means Valentine’s Day and romance. But if you’re stubbornly holding F-rated stocks to sell in your portfolio, you’re just setting yourself up for heartbreak.
The stock market is off to a solid start this year, with the Dow Jones Industrial Average up 2%, the S&P 500 index up nearly 5%, and the tech-heavy Nasdaq composite up 5.6%. Obviously, there are plenty of good names out there and there’s plenty of optimism that the market will have a strong 2024.
The Portfolio Grader is my tool to evaluate stocks to pick out the A-rated stocks to buy and the F-rated stocks to sell.
The Portfolio Grader lets you evaluate all the stocks in the market using metrics such as analyst sentiment, momentum, growth, earnings performance and other factors. Each stock gets a letter grade, so it’s pretty easy to pick out the F-rated names.
While the year is still in the first quarter and there’s plenty of time to recover, I don’t see any reason why investors should put themselves in the red by holding F-rated stocks to sell rather than dumping them. These are seven names you should be selling this month if you haven’t already.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID) is a California-based automobile manufacturer. The company, which was founded in 2007, has an assembly plant in Arizona and is attempting to be a legitimate player in the new wave of electric vehicles.
Shares have shown a little life this year, up 14% in the last month. But Lucid is still far from its 2021 highs when it traded at more than $55.
And the company is trending in the wrong direction. Vehicle deliveries in the fourth quarter were only 1,734, down 10% from the previous year. The company built 2,391, which was down 32% in a year.
In the third quarter, revenue was $137.8 million, down from $195.4 million a year ago. The company’s losses expanded from $530.1 million a year ago to $630.8 million in Q3 2023.
There are way too many negatives, poor demand, mounting losses and shareholder dilution to make Lucid an appealing stock. It gets an “F” rating in the Portfolio Grader.
Fisker (FSR)
Fisker (NYSE:FSR) is another automotive company that’s easy to add to a list of F-rated stocks to sell sow. Yes, there was a lot of optimism a few years ago that multiple EV companies would take off to challenge Elon Musk’s dominance.
That’s not happening. And it’s definitely not happening with Fisker.
Fisker is making a series of moves to pay down debt that’s threatening the company. It’s touring the country in an attempt to drum up interest. And there are indications that the company plans to shift its business strategy.
At this point, however, investors hoped Fisker would be talking about scaling up its business, not retrenching. Fisker produced only 10,142 vehicles in 2023, with deliveries beginning in June. Fisker reported $71.8 million in revenue in the third quarter, but total losses were nearly $100 million.
FSR stock is down 88% in the last year and trades at less than $1 per share. It gets an “F” rating in the Portfolio Grader.
Mullen Automotive (MULN)
Mullen Automotive (NASDAQ:MULN) is the third EV stock on this list, and this one may be the worst of the bunch. While the stock price looks better than the others on this list, coming in at just more than $7, that’s only because of a lot of financial sleight of hand.
Mullen completed three reverse stock splits in 2023 in an attempt to maintain Nasdaq compliance and remain over $1 per share. It did a 1-or-25 split in May, a 1-for-9 split in August and then a 1-for-100 split in December.
And while it’s apparently going to be successful in maintaining is listing, I have to wonder how much of the company is left. Mullen burned through $66.75 million in cash in the fourth quarter and has only $81.5 million left.
Revenue won’t be coming from auto sales. Mullen only delivered 231 vehicles in the fourth quarter, and 260 million in January.
Mullen stock is down 99.9% in the last year. It gets an “F” rating in the Portfolio Grader.
Pfizer (PFE)
It’s a shame that Pfizer (NYSE:PFE) is an F-rated stock. The company deserves a lot of credit for fast-tracking a Covid-19 vaccine, making it possible for people to stay healthy and stop self-isolating. Pfizer’s breakthrough helped things get back to normal in a dark time.
But here’s the thing about the Portfolio Grader: it doesn’t base its ratings on emotion or gratitude for past deeds. And while Pfizer did some great things in 2021 and 2022, the company is much different in 2024.
Pfizer is going up against some tough comparable numbers because people aren’t getting Covid-19 vaccines to the extent they were a year ago. Fourth-quarter earnings were $14.2 billion, down 41% from a year ago. Income of $593 million and 10 cents per share was down from $6.5 billion and $1.14 per share in the same quarter a year ago.
PFE stock is down 37% in the last year and gets an “F” rating in the Portfolio Grader.
Medical Properties Trust (MPW)
Medical Properties Trust (NYSE:MPW) is a real estate investment trust that invests in healthcare facilities that have triple net leases or NNN leases. Those arrangements assign to the tenant all costs related to the asset, not just the rent price. The tenant pays real estate taxes, building insurance and maintenance.
One would think that would insulate a company like Medical Properties Trust from incurring losses, but that’s not how it’s working out. The company is due $50 million from Steward Health Care System, which has fallen behind on its rent payments.
Medical Properties Trust outlined a plan to retain the rent and loan obligations, but Wall Street reacted poorly, as the stock dropped 35%.
Revenue in the third quarter was $306 million, down from $352 million a year ago. MPW stock is down 70% in the last year and gets an “F” rating in the Portfolio Grader.
ChargePoint Holdings (CHPT)
Investors who were fired up about EVs in the last few years were also interested in the infrastructure to make driving an electric vehicle practical. So ChargePoint Holdings (NYSE:CHPT) was considered a promising supplier of EV charging stations and technology.
But the company’s losing more than it’s bringing in even as the U.S. government is making massive investments to increase the number of charging stations nationwide. ChargePoint lost $158.2 million in its third quarter of fiscal 2024, an increase of $84.5 million a year ago.
ChargePoint stock fell to a 52-week low in January and laid off 12% of its workforce in an attempt to slash costs. Despite growth in the U.S., the global EV market remains stagnant and that’s not expected to change this year.
CHPT stock is down 80% this year and gets an “F” rating in the Portfolio Grader.
Chewy (CHWY)
Chewy (NYSE:CHWY) is another company that’s dealing with some tough comparisons due to inflated coronavirus numbers. Pet ownership soared during the pandemic. Economic stimulus checks meant people had more disposable income and nothing to do but stay at home with a new pet to keep them company.
But now people are returning to the office. Inflation took a big bite out of household incomes and household debt is on the ride. And sadly, our furry friends are feeling the pinch.
Revenue in the third quarter was up slightly, to $2.7 billion from $2.5 billion a year ago. But Chewy also posted a net loss of $35.8 million versus a gain of $2.3 million a year ago.
CHWY stock is down 67% from a year ago and gets 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.
