After a brutal housing report today, the market went haywire
and the Dow pushed down below the 10,000 mark. So what do you do
Well the first thing investors need to do is take a cold, hard
look at the "stable" companies in their portfolio. Over the last
few years, "stable" has meant tracking the market steadily
downward on the bad days and failing to bounce back as quickly
during brief periods of strength.
You can't afford to hold on to mega cap stocks like these just
because you think they are going to reduce your risk and reduce
volatility. The fact is that you'll lose money -more slowly than
in other stocks, but you'll lose it just the same.
Here are 9 famous mega-cap stocks that you should dump
immediately rather than slowly let them bleed you dry:
Bank of America Corp. (
Financial holding company
Bank of America Corp.
) serves individual consumers, small to midmarket businesses as
well as large corporations. Despite a diverse client base,
Bank of America has not fared well as of late. BAC stock
has dropped -16% since January, compared to the broader markets
which are down slightly. Even worse, the Bank has slid -27%
over the past 12 months. With the market antics today, Bank
of America just set a new low - so right now, BAC is definitely a
stock to avoid.
Cisco Systems Inc. (
Internet-protocol based networking company
Cisco Systems Inc.
) has had a tough run lately. The tech giant has seen a
-11% stock decrease year-to-date. The last few months have
been particularly bad for Cisco, as it has seen its stock drop
nearly -20% since May. Analysts at EVA Dimensions did not
do Cisco any favors last week, when they downgraded the stock
from "hold" to "underweight." Clearly, the analysts have no
confidence in this stock, and based on its recent history,
shareholders shouldn't either. CSCO stock is also flirting with a
52 week low, like Bank of America.
Exxon Mobil Corp. (
Texas-based oil giant
Exxon Mobil Corp.
) has disappointed shareholders since January, falling -13%
year-to-date. Additionally, the stock has missed earnings
estimates two of the last four quarters. Consequently,
analysts have been scaling back on earnings predictions for XOM,
expanding their earnings growth by a smaller and smaller amount
for the last four quarters. Time will tell if analysts
eventually predict negative earnings for the oil giant.
Down -7% over the past 52 weeks while the broader market has
tacked on +5%, investors should be avoiding Exxon Mobil.
GlaxoSmithKline PLC (
) is a global healthcare company that creates, discovers,
develops, manufacture and markets various pharmaceutical
products, including vaccines, over-the-counter medications and
other health related consumer products. Shareholders have
watched this stock decline -12% since that start of 2010. A
net profit margin of -3.6% also has company officials and
stockholders worried. With the stock currently sitting at
around $37, GSK may be up slightly from its 52-week low of
$32.15; however, the stock's performance over the past eight
months should leave investors wary.
Hewlett-Packard Co. (
Global software and technology company
) has seen a sharp decline of -25% since January, compared to
slight declines in the broader markets. Hewlett-Packard has
met or exceeded its earning estimates for the last four quarters,
however in its most successful quarters it has only beaten
expectations by a few pennies. And it's bidding war over
) could be a costly boondoggle for a company that is having
trouble managing its own operations. As of this writing, HPQ had
set a new 52-week low of $38.36 on Tuesday morning, but could
very well set a lower low soon.
Johnson & Johnson (
Healthcare product producer
Johnson & Johnson
) is another large company struggling in 2010. Since
January, the stock has fallen -10%. The stock appeared
stable for the first few months of 2010, but has seen a decrease
of -10% since mid-May. Additionally, experts have decreased
JNJ's earnings estimates for three consecutive quarters. A
recent recall on contact lenses in Europe and Asia certainly
won't help JNJ's stock in the near future either.
JPMorgan Chase & Co. (
New York based
JPMorgan Chase & Co.
) is another financial holding company that has had a forgettable
performance this year. JPM has disappointed shareholders to
the tune of an -2% drop year-to-date, and a -6% slide over the
past 52-weeks. Analysts are projecting a sales growth of
-14.2% for the current quarter, which can only worry
shareholders. The fact that it is only trading slightly
higher than its 52-week low of $35.16 as of this writing (though
it could make a new one soon) certainly doesn't make them happy
Motor Corp. ADS (
Toyota Motor Corp.
) is famous for its Japanese line of cars, minivans and
trucks. While the brand may be well established world-wide,
its stock has fallen -18% in 2010. Toyota has not fared any
better over the past 12 months either, as the car manufacturer is
down nearly -20% since last August. It's clear that
analysts have little faith in Toyota, as they have predicted
earnings of just $0.10 for this quarter. With a net profit
margin of just 2.9% and a return on average assets of just 1.9%
last quarter, Toyota is anything but a strong buy right now.
Wal-Mart Stores Inc. (
Last on the list of large stocks to sell is retail giant
). Like the rest of the companies on this list, Wal-Mart
has had a rough 2010, down -4% year-to-date. Analysts have
scaled back on Wal-Mart's earnings estimates from last quarter,
despite this time of year being considered "back-to-school"
shopping season. Its stock may be up around $3 since early
July, but Wal-Mart still remains a sell due to its yearly slide
and decreased expectations.
As of this writing, Louis Navellier did not own a position
in any of the stocks named here.
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