In This Article:
It’s been a tough year for the stock market, especially for the tech sector. As of this writing, the tech-heavy NASDAQ is down 27% year-to-date.
I should also add that tech has been shrinking as a percentage of the S&P 500 this year due to problems at Amazon.com (AMZN), Alphabet (GOOGL), Meta Platforms, Inc. (META) and Microsoft Corp. (MSFT). And not one of these companies has posted gains over the past year.
Now, you should know this isn’t the first time this has happened in tech. In the late 90s, the market had a bubble burst and literally 54% of the S&P 500 was in less than 10 tech stocks at the time. The tail of the S&P then did better than the top end for seven years.
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Currently the tech sector is facing many challenges, due in large part to the trajectory of the industry during the pandemic. Companies across the tech industry are now having to cut costs and institute hiring freezes.
They’ve also had to reduce their workforce. Large companies like Cisco Systems (CSCO), Amazon and Twitter, Inc. (TWTR) have had to make layoffs that totaled nearly 29,000 workers in the past three months. And the tech sector as a whole has laid off more than 85,000 workers in the U.S., with some mentioning the effects of the pandemic and over-hiring during periods of rapid growth.
With all of this in mind, I took a look at a number of well-known tech stocks to see if there are any that should be sold immediately. There are 10 stocks I recommend selling now; I bet some of these names will surprise you.
| Ticker | Company Name | Quantitative Grade | Fundamental Grade | Total Grade | |
|---|---|---|---|---|---|
| BlackBerry Limited | F | C | D | ||
| Brightcove Inc. | F | C | D | ||
| DoorDash, Inc. Class A | F | C | D | ||
| DocuSign, Inc. | F | C | D | ||
| HubSpot, Inc. | F | C | D | ||
| Meta Platforms Inc. Class A | F | D | F | ||
| RingCentral, Inc. Class A | F | C | D | ||
| Spotify Technology SA | F | D | F | ||
| Take-Two Interactive Software, Inc. | F | D | F | ||
| Zoom Video Communications, Inc. Class A | F | C | D |
The reality is these stocks are in what I like to call “Phase 4” of their lifecycle. This is when institutional investors start to sell a stock in chunks and it gains downward momentum. It will fall further and further, wiping out the gains of folks who are still hoping it’ll go back up.
So if you want to make real money, you need to be invested in “Phase 2” stocks. This is when all the institutional buying pressure builds and the stock breaks out.
I explained in full detail about the different phases of a stock during this past Wednesday’s One Percent event, as well as when you know it’s time to jump into a stock and when it’s time to jump out. I also revealed an income investment that can put thousands of dollars of cash into your pocket over and over again – starting immediately.