Stocks to sell

As the old saying goes, it’s just as important to know what stocks to sell (or not buy) as it is to know what to buy. And many would say it’s more important to know what to avoid or get rid of, because it can cost you even more than holding a non-performer.

The stocks here aren’t necessarily bad companies or doomed to failure. Some of these companies are having a tough go of it for one reason or another. Some are out of favor right now. And some are seeing significant downward momentum for one reason another.

Regardless of their specific reasons, they’re stocks to avoid or sell for now.

This is a strange market and September will bring a lot more volume back to the markets. Given the hurricane season is gearing up and the pandemic continues its biggest wave since last year, there are questions about the economy.

We’re starting to see how it’s shaking out and Q3 should be interesting, to say the least. Don’t hold these stocks into the last quarters of this year. Oh, and just in case you needed another reason to avoid them, each has an F-rating in my Portfolio Grader.

  • AppFolio (NASDAQ:APPF)
  • Alamos Gold (NYSE:AGI)
  • CDK Global (NASDAQ:CDK)
  • Campbell Soup (NYSE:CPB)
  • Kinross Gold Corp (NYSE:KGC)
  • Perrigo (NYSE:PRGO)
  • US Cellular (NYSE:USM)
  • Emergent BioSolutions (NYSE:EBS)

Stocks to Sell: AppFolio (APPF)

Source: Pavel Kapysh / Shutterstock.com

This cloud-based solutions provider for the property management sector has been slogging through a tough housing market since the pandemic first hit last year.

With the eviction moratorium hitting their core customers — companies with an average of 300 properties under management — growth has been challenging. It seems to have maintained its client base, but this isn’t the sector to be in right now.

Both Q1 and Q2 numbers have missed estimates. It also divested from its legal services division which has given APPF some cash but isn’t driving new growth yet. Extension of the eviction moratorium is keeping the stock, and its clients, in limbo. It’s a stock to sell.

APPF has lost 28% year-to-date and that trend looks in place for the near future.

Alamos Gold (AGI)

Source: allstars / Shutterstock.com

Gold has been in a trading range for quite a while now. And gold producers have also gotten stuck in a range as well. Usually gold producers rise faster than the price of gold, since their margins rise as gold prices rise. Extraction costs are fixed, so the more they get for gold, the more they make.

But in this market, they’re stuck with what they’ve got. Add to that, the pandemic has slowed operations and demand. Also, cryptocurrencies are now very hot and that’s displacing a lot of gold demand for alternative investments.

AGI is a Canada-based gold miner with operation in Canada, Turkey, Mexico and the U.S. It’s a stock to sell because gold isn’t attracting buyers like it used to right now and prices aren’t going anywhere.

AGI has lost nearly 12% in the past 3 months, and 21% in the past 12 months. The trend is not your friend here.

Stocks to Sell: CDK Global (CDK)

Source: Shutterstock

This isn’t a household name, but it’s one of those behind-the-scenes companies that has a strong position in the sector it focuses in. That sector is information technology and digital marketing support for the retail automotive industry, which includes industrial and agricultural machinery as well.

While its platforms help manage and market these businesses, the supply chain issues that have been here since the pandemic began have snarled logistics. That means its clients aren’t exactly heavy users of CDK’s solutions.

Its fiscal year Q4 number missed estimates in mid-August and that hammered the stock as well. In the past 3 months, CDK stock is down nearly 23% and it remains a falling knife. CDK is a stock to sell.

Campbell Soup (CPB)

Source: HeinzTeh / Shutterstock.com

Year-to-date, this 150+ year old consumer stock that owns Pepperidge Farm, V8, Swanson, Pop Secret, Snyder’s, Cape Cod Chips and other familiar brands is down 11%. The S&P 500 is up 21%.

That’s a 30-percentage point differential. And this is at a time when comfort foods have been in large demand. However, younger generations aren’t looking for the same foods that their parents did. They have been raised in a world with a darker view of processed foods and “traditional” brands.

Differentiation will be tough for CPB, which presents a long-term challenge. That’s why it’s a stock to sell at this point.

Stocks to Sell: Kinross Gold (KGC)

Source: T. Schneider / Shutterstock.com

Another Canada-based global gold mining company, KGC is one of the five largest gold companies in the world.

As highlighted with fellow producer AGI, gold is in an odd historic moment relative to cryptocurrencies. Fintechs and individuals are buying cryptos rather than buying gold as alternative investments. And Wall Street is providing as much exposure to crypto demand as investors can handle.

This may all blow up at some point if the markets ever correct. But for now, gold is playing second fiddle and gold miners aren’t faring well. KGC is down 21% in the past three months, so its 1.9% dividend is cold comfort. There’s no bottom feeding here yet. It’s a stock to sell.

Perrigo (PRGO)

Source: Shutterstock

With nearly 70% of PRGO revenue derived from the U.S. over-the-counter (OTC) drug market, you might expect to recognize the name. But you’d have to read the fine print, since it’s a private label firm that sells a lot of store-related generic brands.

But if you buy store brands, there’s a good chance you’ve used a PRGO product. The company used to have a generic drug business as well, but it sold that earlier this year to focus on it OTC business. The trouble is, with social distancing and less moving about, people aren’t getting colds and the flu. That hurt Q2 earnings, which were reported in mid-August. Also, PRGO has struggled with its generic division for years. It’s good it’s gone, but what happens next isn’t clear.

PRGO stock has lost nearly 12% in the past three months and isn’t inspiring a lot of confidence moving forward. It’s a stock to sell.

Stocks to Sell: US Cellular (USM)

Source: Shutterstock

As the No. 4 mobile carrier in the U.S., you would think that USM is pretty comfortable. The three top carriers are spending billions upgrading their networks to 5G and it simply waits until they’re finished building out their platforms and then it rents space on their systems.

But that also puts USM at the mercy of the larger carriers. And USM focuses on more rural and ex-urban markets. Because the populations aren’t as dense in these service areas, larger carriers usually don’t run 5G out there until later in their build outs.

As more people head out of cities, they’re going to demand top-tier service and at this point, USM isn’t playing in that game. It’s a stock to sell but the company isn’t going to fall off the face of the Earth. It will keep its No. 4 standing, but a merger is unlikely since it would set off antitrust alarms in states and with the Feds.

USM stock is down 17% in the past three months.

Emergent BioSolutions (EBS)

Source: Shutterstock

In early August EBS did the one thing that will hammer a stock — it cut guidance for the rest of the year.

EBS isn’t your typical biotech. It focuses on developing and commercializing medical countermeasures. For example, it has the only government approved anthrax vaccine. It also makes Narcan, the drug that revives opioid overdose victims. EBS also has products that protect against infectious diseases like cholera and typhoid.

Those drugs certainly have their uses, but as biotechs find new solutions to infectious diseases, it’s going to keep EBS as a niche player with no significant portfolio to leverage. It’s not attractive to larger industry players and among investors it’s a stock to sell.

EBS has lost 37% year-to-date, and the rest of the year isn’t going to improve.

On the date of publication, Louis Navellier has no positions in any stocks in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article. The InvestorPlace Research Staff member primarily responsible for this article did not hold (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.

Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.

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