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…
EPAM Systems (EPAM)
EPAM Systems has been the behind-the-scenes hero for many companies, helping them handle the techy stuff while they focus on their core game.
Since 2019, EPAM’s been enjoying a nice run with steady top-line growth and margins sitting pretty between 32-34%. However, all good things face challenges. With the outsourcing trend maybe hitting a pause and competition dialing up, it might be a good time to re-evaluate EPAM’s spot in your portfolio. The tech scene changes in a blink, and staying ahead is the name of the game. Is EPAM still your tech ally or is it time for a friendly handshake and a strategic exit?
Texas Instruments (TXN)
After a Q4 revenue forecast miss, TXN shares slid 5%. They’re expecting revenue between $3.93 billion to $4.27 billion, shy of the anticipated $4.50 billion, making Wall Street a tad jittery. This led to a sell-off, dimming the shine of an otherwise decent Q3.
While Q3 saw a better than expected EPS of $1.85, the revenue of $4.53 billion was a bit below the mark. Sure, TXN chips are everywhere from cars to gadgets, but they’re not riding the AI wave, contributing to an 11% dip in stock value YTD. Might be a good time to re-evaluate TXN in your lineup.
Home Depot (HD)
While Home Depot stock saw a 65% rise over five years, it’s down 10% YTD, with most of the dip coming last month.
Retail theft is a hiccup, but the real snag is the sharp drop in housing demand, now at a decade low. HD held strong in 2022, yet recent quarters show declining revenue and earnings, hinting the tide is turning.
With inflation poised to tighten consumer spending, and a noticeable dip in big-ticket buys, HD has already projected a sales slump in Fiscal 2023. It might be time to reconsider this stock in your portfolio.
