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Three Stocks to Sell
12/18/2013 9:00 am EST
Sy Harding, editor of Street Smart Report, highlights a trio of stocks that investors should avoid owning; those who already own these shares, he counsels, should consider taking profits.
Best Buy (BBY)
Best Buy's turnaround story has been impressive, making its stock one of the biggest winners this year, by far. However, it looks like investor enthusiasm has gotten ahead of reality.
Our technical indicators have turned down from their overbought levels, triggering intermediate-term sell signals.
Company insiders have been selling quite heavily into the strength over the last six months, with almost no buying. Institutions have also been net sellers.
No guarantee, of course, but the technical indicators are saying lower prices probably lie ahead for Best Buy, with MACD triggering its first sell signal on BBY, since its buy signal in January.
Garmin, Ltd. (GRMN)
Garmin is a well-known maker of navigation systems and devices used in automobiles, boats, and the aviation industry, as well as ‘hand-held’ portable units used in outdoor and fitness applications.
It's been a popular stock with investors since May, fueled by second and third quarter results, which, although lower year-over-year, beat Wall Street's estimates.
However, our technical indicators have triggered intermediate-term sell signals from their overbought zones and it looks like Garmin has topped out for now.
On the fundamentals, Garmin does not seem to have an easy road ahead, as multiple alternatives to its products and services become available, and competition in smart-phone navigation apps and automobile-installed navigation systems, becomes more pronounced.
Boston Scientific (BSX)
Boston Scientific develops and makes minimally invasive medical devices, including catheters, guide-wire systems, diagnostic endoscopy equipment, and the like.
The company's stock has surged in 2013, in spite of only fractional gains in earnings and a continuing decline in top-line revenues.
Bearish analysts point to the company's profitability trailing its competitors, due to a high mix of lower-margin products, and worry about more competition coming in its important stent business, with Abbott Laboratories' launch in Europe, of a new stent technology.
However, our negative outlook for the stock is primarily due to technical analysis, including sell signals on technical indicators that have been fairly adept at staying on the right side of the stock's moves in the past.
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