The right stocks can make you rich and change your life.
The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.
They’re pure portfolio poison.
Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.
That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.
I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.
But first, if you own any or all of these “toxic stocks,” sell them today…
Cassava Sciences (SAVA)
Cassava Sciences, a clinical-stage biotech firm, is a classic high-risk play. Its fortunes hinge largely on the success of just one of its offerings, simulfilam, its Alzheimer’s treatment candidate. While the stock has seen some upward movement recently, investors should tread carefully.
SAVA stock is not without its controversies. Past allegations of scientific misconduct, though currently resolved, have previously rocked the stock, and there’s always a possibility of new claims surfacing. This uncertainty adds a layer of volatility that investors need to be mindful of.
More critically, the long-term risk is substantial. If simulfilam fails to clear the regulatory hurdles, the downside could be significant. While the potential rewards are high if the drug succeeds, the current landscape suggests a cautious approach. It might be wiser to wait for a more opportune moment, potentially during a period of weakness, before considering an investment in Cassava Sciences.
Boeing (BA)
The aircraft manufacturer is facing renewed scrutiny following a flight safety incident, leading the FAA to ground all domestic 739 Max 9 jets. This development has not only raised serious questions about Boeing’s aircraft quality and safety but has also negatively impacted BA stock, resulting in a significant downturn.
For those considering this as a potential ‘buy the dip’ opportunity, it’s time to reassess. The repercussions of this incident could have a prolonged impact on Boeing’s performance. Additionally, with 0….
1200 trading at a high forward earnings multiple of 54.8 times, the room for upside, even in the event of a swift resolution, appears limited. This situation warrants a cautious approach, and investors may want to consider other options in their portfolio for the coming week.
Palantir (PLTR)
Palantir, the high-profile data analytics firm, is facing a critical reassessment after its stock’s impressive 150% surge over the past year. Analysts at Jefferies Financial Group have notably shifted their stance on PLTR, downgrading the stock as we enter the New Year. Their analysis suggests that the excitement surrounding artificial intelligence (AI) contributions to the company’s growth may be overestimated, potentially leaving the stock running on fumes.
Jefferies’ downgrade from ‘hold’ to ‘sell’ and the reduction of their price target to $13 highlight growing concerns over Palantir’s valuation post its bullish run last year. This reassessment is particularly timely, considering Palantir’s ongoing challenges with the U.S. Army regarding data ownership—a key relationship for the company.
Despite a strong performance in the first half of 2023, Palantir’s recent trajectory shows a mere 2% increase in the past six months, indicating a possible slowdown. With these factors in play, investors might want to reconsider their position in PLTR as we navigate the early stages of 2024.
