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The NASDAQ was sliding at midday yesterday, but the Dow and S&P 500 caught their breath after a five-session losing streak.
It's great to see all the green across hundreds of stocks as the markets head higher again, but, like I told my viewers on "Money Morning LIVE" yesterday, it's not all good.
The broader markets are one thing, but I want help make sure your portfolio is deep in the green. That involves telling you about stocks to buy, sure, but not as many investors realize timely selling of stocks - trimming the dead wood - is just as important.
I've got five stocks on my screen right now. They're extremely popular; millions of investors own them, and hundreds of millions of shares of these companies change hands every day... but I'm making the week's biggest "Sell" call on them today.
Don't wait for a turnaround; don't wait for the next quarter. Hell, don't wait until tomorrow - unload these companies for whatever you can get today...
Stocks to Unload at Any Price Today
Plant-based foods are more controversial than foods should be. There are millions of fans, folks who swear by the stuff. The sales growth is certainly there, growing by triple and double digits each year for the past few years. Me? I'm not crazy about it. We're not here to debate the relative merits of veggie vs. beef burgers; we're talking money.
And folks, it's not in Beyond Meat Inc. (NASDAQ: BYND) right now. And I'm using one often-overlooked metric to make this sell recommendation: Tangible book value (TBV) per share. That looks at a company's tangible assets divided by its current shares outstanding. It's what you would get per-share if the company had to liquidate its assets immediately.
That's telling me BYND is massively overvalued and probably ripe for a fall - don't own it when it does. The TBV of the entire company is $4.04, which means it's trading at around 28 times its tangible book value.
I'm bearish on Virgin Galactic Holdings Inc. (NYSE: SPCE) right now, as well. It has OK financials, but its valuation and margins are dismal. This company is one accident, one explosion away from flat-out bankruptcy, and it remains extremely unclear what its business model might be in the future. Its price-to-sales ratio is worse than 99% of companies in its industry; the TBV of the entire company is $1.85, yet it trades north of $24. Bank of America doesn't think it'll stay there, though, because it just cut its price target by 40%. If none of this convinces you, then consider that even Cathie Wood just dumped this stupid stock.
Sell AMC Entertainment Holdings Inc. (NYSE: AMC) and GameStop Corp. (NYSE: GME). These stocks come in and out of the public consciousness depending on where we are in the "meme-stock cycle," and they're very much "in" right now. You should be out. It's possible to make money on these two stocks if you're trading them, but there's no reason to do that at the moment. Sure, GameStop may execute well on its turnaround plan, but that's nothing to bank on right now.
I think the meme-stock party is going to end, and it's going to end under the bootheel of regulators. Since the early days of the World Wide Web, the government has targeted manipulation efforts, on computer bulletin boards, message boards, and, yes, even fax machines. If we were to go and physically stand on Wall Street and do what WallStreetBets is doing online, we'd be arrested for manipulating stocks.
And that sets up the next "Sell" recommendation perfectly, if I do say so myself. You can get my live buy and sell recommendations every day the markets are open right here at "Money Morning LIVE". I'm streaming every weekday at 8:30 a.m. Eastern.
Now, I have some colleagues who feel differently about this stock, but from where I'm sitting, I say get rid of Robinhood Markets Inc. (NASDAQ: HOOD). There's a very real risk that the U.S. Securities and Exchange Commission's Gary Gensler could do as he suggested in Barron's magazine and slam the door on payment for order flow (PFOF) - the practice that enables Robinhood... and Fidelity, and Schwab, and TDAmeritrade to offer "zero commission" trades. That's a key driver of the meme-stock party that's been raging across the markets for more than a year now.
Could Robinhood and other discount brokerages offer free trades without sending customers' orders elsewhere for filling? Eh, maybe. Maybe even probably. There are some plausible alternatives. In the meantime, HOOD will get clobbered whenever payment for order flow becomes a cable-news talking point, and it'll get clobbered even worse if the SEC puts a halt to the practice. The company remains under fire for a host of other "game-ification of investing and trading" issues, too.
Of all the stocks I've talked about here today, Robinhood is worth watching, but make sure you don't own it while you watch. There may be a time to get back in, and if I think there is, "Money Morning LIVE" viewers will hear about it first.
If you haven't joined us yet, there's a story you should know up front: My "Money Morning LIVE" colleague, Mark Sebastian, was actually fired on the spot from his job at the CBOE when he came to his bosses about a strategy he thought could potentially make his clients - regular investors - a mint. So he dedicated his life to ending the stranglehold Big Money has on the markets; he started a "Profit Revolution." Now he's showing everyone the strategy that got him blacklisted - you've got to see the profit potential for yourself here.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.