While the concept of Nasdaq stocks to sell won’t resonate too kindly with generally optimistic Americans, it’s become a reality. It’s not just about the fact that on a year-to-date basis, the benchmark S&P 500 index still trades in negative territory. Rather, it’s the unpredictable nature of the equities sector that should inspire inventors to consider some early spring cleaning. Fundamentally, the Federal Reserve appears poised to raise interest rates aggressively in 2023. Recently, employers added 263,000 jobs in November, beating analysts’ expectations. However, this datapoint also confirmed that the central bank’s prior rate hikes hardly dented a top catalyst of inflation. Therefore, more money will continue to chase after fewer goods unless the Fed steps in hard.
Simultaneously and perhaps contradictorily, it must also approach the situation gently; otherwise, a recession may materialize. With so many variables at play, it’s probably best to avoid vulnerable Nasdaq stocks to sell.
Once an intriguing competitor in the ride-sharing industry, Lyft (NASDAQ:LYFT) represents one of the Nasdaq stocks to sell because of competitive pressures. Obviously, I’m referring to sector powerhouse Uber (NYSE:UBER). To be fair, neither company offers an encouraging financial backdrop for prospective investors. However, the latter’s massive footprint could pose relevancy issues for the former.
Yes, it’s possible that Uber may be biting off more than it can chew. Its global expansionary efforts are risky, especially amid broader recessionary fears. At the same time, Lyft may be too conservative focusing mostly on the U.S. market. As well, from the consumers’ perspective, the two enterprises are redundant.
When it comes to viability, the free market provides a clear picture of which company investors believe will stick around. Again, UBER does not bring much encouragement, posting a near-35% YTD loss. However, LYFT hemorrhaged a staggering 75%. It’s a night-and-day difference, implying LYFT is one of the Nasdaq stocks to sell.
Part of the narrative for Opendoor (NASDAQ:OPEN) – which specializes in the iBuyer business model of buying and flipping real estate – representing one of the Nasdaq stocks to sell centers on its latest corporate reorg. Per TechCrunch.com, Opendoor co-founder Eric Wu will step down as CEO to serve as president of marketplace. In his place will stand Carrie Wheeler.
Of course, Wu did the usual executive spiel of doing what’s best for the company and driving shareholder value. Nevertheless, you have to read the psychological undertones here. No executive worth their salt wants to step down from the helm under poor circumstances. Keep in mind that as Wu exits center stage, OPEN stock gave up nearly 89% YTD. That’s a tough blight to explain on your resume. Still, it’s not Wu’s fault nor of his team. Rather, the business model just doesn’t make sense in a deflationary environment – an environment that could materialize as the Fed raises rates. Thus, OPEN is one of the Nasdaq stocks to sell.
Similar to Opendoor, Zillow (NASDAQ:Z, NASDAQ:ZG) largely justifies its inclusion among Nasdaq stocks to sell because of broader market pressures. With the Fed likely to raise interest rates throughout 2023 to combat stubbornly high inflation, Zillow faces severe headwinds.
True, home sales prices will likely decline from their highs as borrowing costs increase. But that might not help prospective homebuyers much if high-paying white-collar jobs get the axe. Also, higher rates translate to affordability problems. Essentially, homebuyers must put up more cash to secure deals or risk getting snubbed by mortgage lenders.
But it’s also fair to point out that hubris played into Zillow’s troubles. The company’s iBuyer business model failed to pan out. And during a high interest-rate environment, home flipping becomes incredibly treacherous. Therefore, Zillow is one of the Nasdaq stocks to sell – and it gets no sympathy from me.
Marathon Digital (MARA)
Most likely, I’m going to attract a lot of heat for mentioning cryptocurrency-mining specialist Marathon Digital (NASDAQ:MARA) as one of the Nasdaq stocks to sell. To be clear, the inclusion has nothing to do with the company itself. Nor have I lost interest in cryptos and the broader blockchain ecosystem. Rather, I just lost interest in the space right now.
When circumstances normalize, we can start talking about individual cryptos and public blockchain firms like Marathon. Unfortunately, we may be some time away from this normalization. At one point, the total market capitalization of all digital assets soared toward the $3 trillion level. Unfortunately, that leaves plenty of “toxic” bullishness to work through. To put it bluntly, cryptos need a cleansing before the sector can rise higher.
However, MARA is highly dependent on crypto sentiment. Without enthusiasm and rising demand for digital assets, the mining component will suffer. Therefore, I have no choice but to consider MARA as one of the Nasdaq stocks to sell.
HIVE Blockchain (HIVE)
As another crypto-mining specialist, HIVE Blockchain (NASDAQ:HIVE) immediately generates credibility concerns. Just like Marathon above, HIVE relies heavily on positive sentiment in the underlying sector for market success. Without it, shares will struggle.
Indeed, in late November of 2020, HIVE traded hands for around $2. At the peak of its power (in February of next year), shares traded over the $20 threshold. Basically, over the course of a few weeks, HIVE more than 10X-ed itself. But again, the problem is that the company depends on sustained crypto sentiment.
At time of writing, HIVE stock trades at $2.22. We are back at square one. Making matters worse, the volatility for HIVE exceeds that of the broader crypto ecosystem.
Since the start of the year, HIVE hemorrhaged a very worrying 83% of equity value. Since mid-August of this year, shares plunged almost 70%, suggesting almost zero reprieve regarding near-term sentiment. Thus, it’s one of the Nasdaq stocks to sell.
Coupa Software (COUP)
One of the intriguing cases regarding Nasdaq stocks to sell, Coupa Software (NASDAQ:COUP) admittedly doesn’t feature a clear-cut narrative. Still, I believe it’s worth being extremely cautious if not outright skeptical of COUP. A technology platform specializing in business spend management, Coupa offers relevancies under normal economic cycles. However, with concerns about a recession rising, Coupa may encounter significant headwinds.
Essentially, enterprises will be looking to cut expenditures across the board, which may impact COUP. However, it’s also fair to point out that Vista Equity Partners is exploring a deal for Coupa, per Bloomberg. I suppose for speculators, COUP may represent enticing speculation as a buyout target. Of course, this approach also presents its own risks.
Fundamentally, you should be aware that Gurufocus.com labels Coupa a possible value trap. Among the five red flags that the investment resource identified, the company suffers from poor financial strengths and a low Altman Z-Score, which reflects a higher-than-average risk of bankruptcy in the next two years.
PTC Therapeutics (PTCT)
On paper, PTC Therapeutics (NASDAQ:PTCT) doesn’t immediately register as one of the Nasdaq stocks to sell. According to its public profile, the pharmaceutical firm focuses on the development of orally administered small molecule drugs and gene therapy which regulate gene expression by targeting post-transcriptional control mechanisms in orphan diseases.
As well, PTCT outperforms the benchmark equities index in the charts so far this year. Since the January opener, shares only 1.2% of market value, which is basically a win under the current dour ecosystem. However, shares have been incredibly choppy across recent sessions. In addition, PTCT’s trailing one-year performance of nearly 14% up may inspire investors to sell into strength.
Per Gurufocus.com, PTCT may represent another value trap. As with Coupa Software above, PTC suffers from five red flags, including poor financial strength and a distressed business (per its low Altman Z-Score). In addition, its cash-to-debt ratio of only 0.7 times ranks worse than 85% of the underlying sector.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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