12/4/2013 4:00 PM ET|
5 stocks to sell now
It's time to lose these laggards and overvalued names, especially if you can still come out ahead.
Our pans fall into two categories: companies with poor prospects and those with better prospects that trade at absurdly high prices. If you own any of these five stocks, consider dumping it, or at least paring back, especially if doing so won't result in a taxable gain.
We start with three companies that pay generous dividends but appear to be struggling to keep up the disbursements.
On the surface, profits seem to be rising at CenturyLink (CTL). But take out one-time items and the telecom company's operating income and cash flow are down from a year ago, largely because customers are dropping their landline phones. Moreover, analysts expect virtually no profit growth over the next few years.
What's holding up the stock price is the fat $2.16-per-share annual dividend, which gives the stock a 6.4 percent yield. But CenturyLink cut the payout in 2013, and Brad Lamensdorf, co-manager of the Ranger Equity Bear ETF, expects it to do so again within the next year.
A juicy dividend is also propping up shares of Diebold (DBD). The maker of automated teller machines is paying at an annual rate of $1.15 per share, and it has a long history of yearly dividend hikes. But those increases have gotten smaller as Diebold's finances have gotten tighter.
Declining sales, a major restructuring and the recent departure of the company's chief financial officer all raise red flags. Plus, declining cash flow puts the dividend in jeopardy. Finally, the stock, at 18 times projected earnings, isn't cheap. (All data are through Nov. 1.)
Dominion Resources (D) owns regulated electric utilities in Virginia and North Carolina, regulated natural gas utilities in Ohio and West Virginia, as well as various unregulated units. Analysts expect earnings to grow at a 7 percent annual clip over the next few years. That's not terrible, but the stock sells for a lofty 18 times estimated year-ahead earnings.
Also troubling is that Dominion has been borrowing money and issuing stock to support its $2.25-per-share annual dividend, a 3.5 percent yield. The company can't keep making those generous payments forever.
But Tesla's stock, which has zoomed by a factor of seven since going public three years ago, is priced for a perfect future. It sells for 135 times estimated earnings for the next four quarters. Any stumble will deliver a nasty shock to Tesla bulls.
Like Tesla, 3D Systems (DDD) is a hot stock in a hot industry. Shares of the maker of three-dimensional printers have nearly quadrupled over the past two-and-a-half years. Although 3D's printers could revolutionize manufacturing, the company needs to drum up interest among consumers to support a stock that sells for 53 times projected year-ahead earnings.
That hasn't happened, Lamensdorf says. The printers hit Staples shelves last summer, but his checks indicate that few have sold, apparently because they're expensive and because consumer applications aren't obvious.
More from Kiplinger's:
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"Also troubling is that Dominion has been borrowing money and issuing stock to support its $2.25-per-share annual dividend, a 3.5 percent yield. The company can't keep making those generous payments forever."
They have for the past 25 plus years I've owned it and even higher dividend rates. They know how to run that company. Buy and hold as they continue to grow.
The market lost its last shred of credibility when the government started pumping TRILLIONS. Its all smoke and mirrors. Wall Street (under DEMOCRAT control no less) is loving it. Image, the fat getting fatter under the political party that shouts from the hill top how they're for the little guy. Snake oil salesmen and the masses are buying- biggest con in history. How gullible have Americans become? How corrupt and in the tank is the drive by media?
The house made of toothpicks is already crumbling if you care to open your eyes. Wait until the disease called Obamacare infects us all. When people are forced to purchase Obamacare instead of a car, refrigerator, roof or whatever: when you take that much money out of the free market for something that doesn't produce a tangible good, there will be huge negative affects on the Market. What happens when people have to choose between paying for mandated Obamacare and their mortgage?- can anyone say round 2 of another housing collapse. Democrats will get their redistribution of wealth all right; everyone will be poor and then who will the poor look to for help?
Traditional "buy & hold" stock investing is a dead concept anyways. Daytrading is the only way to go! Almost every time I've invested, I've lost money! But I make a living daytrading! I'm in, I'm out...without all the drama! I could careless what products a company makes, what it earns or what their future projections are...if it's stock is running that day, I'm hitting it for 5%-35%!
Dear Mr. President: I can't afford the patent for credit as inventor of the patent. This needs to be patented to the USA ASAP! Thank you.
INVENTION DONATED TO "WE THE PEOPLE" of THESE UNITED STATES.
I found a simple solution with what to do with nuclear reactors, once "perpetual motion" goes global (to end global warming). We replace the nuclear rods with storage rechargeable lithium battery rods, for the excess we create in using our systems for emergency magnetic power and blast it back into our power lines. Thence no nuclear accidents or nuclear waste.
The top two investments to save the US dollar is my perpetual motion invention. aka: Magnets (Lodestone) and Iron. What do I mean by Magnets and Iron? As found in Ripley's Believe it or Not: The automobile that rides uphill in neutral on "Lodestone Hill" How do you create mine invention? You take magnetic sand and pull it through a circulator / generator in glass housed copper tubing. The magnetic pole is then reversed in the in the generator and pushes it through thee tubing, that then pulls it through once again by polarity. You have the tubing then spiral around a hot water heater (creating steam combustion) and have the water circulate through your home for heating in plain copper tubing. The secret of the magnetic sand is iron filings that are attracted to the circulator / generator. There? Perpetual Motion! ! ! I have just conquered electricity, oil heat and solar panels and wind turbines. An Auto is a Iron Horse! You embed highways and byways with magnets and it draws the vehicles up the road. I have just conquered gasoline! ! !
If you watch the Stansberry.com Report? The 100% Report is in Art, as found in my Flickr.com pictures at the top of the page. Alice Walton is the largest collector of Art.
For more simple freedoms, invest in the Sheepherder Wood / Coal Cook stove and Down Comforters, and Wool Blankets.
GRANTED TO: THE UNITED STATES of AMERICA
Signed: David M Pedjoe, 12/03/2013 DMP
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March new home sales hit an annualized rate of 384,000, which was down from the revised February rate of 449,000 (from 440,000), and worse than the rate of 455,000 that had been broadly expected by the Briefing.com consensus. Nasdaq -26.18 at 4135.28... NYSE Adv/Dec 1325/1443... Nasdaq Adv/Dec 683/1597.
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