The market might be at an all-time high, but that doesn’t mean that every stock out there is a buy. The reality is that it remains a stock pickers world and investors need to choose wisely to ensure that their portfolio grows and doesn’t become swamped in a sea of red ink.
The fourth quarter 2023 earnings season that is now wrapping up provided some truly dreadful prints that showed many companies are struggling and would make bad investments. A lot of these stocks have been long-term laggards and declined over the last five years as the overall market has risen.
Spotting these dreadful stocks and steering clear of them is as important as picking good securities to allocate capital to. Here are three stocks to sell in March before they crash and burn.
Dollar Tree (DLTR)
Dollar Tree’s (NASDAQ:DLTR) stock is down 15% on the day it announced plans to close nearly 1,000 stores and reported a massive quarterly loss. DLTR stock is now down 11% over the past year and up only 27% through five years. Sentiment towards this stock has only been made worse after the the company said it will close 970 of its Family Dollar stores as it tries to revitalize its crumbling business.
News of the store closures comes as Dollar Tree reported a loss of $1.71 billion, or $7.85 a share, for its fiscal fourth quarter. A year earlier, Dollar Tree posted a profit of $452.2 million. Revenue in the latest quarter came in at $8.63 billion, which was below analysts’ estimates of $8.67 billion. The company blamed the poor showing on increased competition from rival discount retailers such as Walmart (NYSE:WMT).
Looking ahead, Dollar Tree offered 2024 revenue and profit guidance that each fell short of Wall Street forecasts, making DLTR stock one to sell in March.
Nordstrom (JWN)
Nordstrom (NYSE:JWN) is another retailer whose stock has been a long-term disappointment. JWN stock recently fell 9% in one-day after the department store chain issued a weak outlook for the year ahead. While Nordstrom beat estimates on the top and bottom lines with its Q4 2023 results, the company gave tepid guidance, sending its share price lower. Over the last five years, Nordstrom’s stock has declined 60%.
For this year, the company said it expects full-year revenue, including retail sales and credit cards, will range from a 2% decline to a 1% gain compared with the previous year. Management said it continues to see soft demand as consumers become more price-conscious in the wake of high inflation. Nordstrom is also seeing lagging sales at its off-price retailer, Nordstrom Rack, and struggling with bloated inventory levels.
The poor performance, multiple problems, and weak outlook make JWN stock one to sell in March before it crashes and burns.
Macy’s (M)
We’ll stick with the retail theme and add department store chain Macy’s (NYSE:M) to the list of stocks investors should sell in March. Like Dollar Tree, Macy’s recently announced store closures, and, like Nordstrom, Macy’s issued a weak forecast for 2024. Macy’s said it will close 150 stores as its financial results continue to deteriorate. News of the store closures comes after the company reported a 2% year-over-year sales decline in Q4 2023.
The 166-year-old department store chain said that it expects sales to remain stagnant this year. The store closures are being positioned as part of a turnaround strategy under new CEO Tony Spring, who took the helm of the company in February of this year. In recent months, Macy’s has also announced staff layoffs and entertained sales offers for its real estate holdings. M stock has fallen 10% over the last five years.
On the date of publication, Joel Baglole 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.