Don’t be fooled by these toxic tickers…
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 a 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…
Blink Charging (BLNK)
Blink Charging operates in the promising electric vehicle (EV) space, designing, manufacturing, owning, and operating charging stations for electric cars.
The potential for profitability seems compelling, considering the projected surge in EV sales, expected to reach over 31 million units by 2030, accounting for nearly a third of all vehicle sales.
However, there’s a significant challenge for Blink–Tesla (TSLA) and its widely distributed Supercharger network. As a leading EV manufacturer, Tesla has established over 12,000 charging units in the US and Canada. Recent agreements with other automakers, such as Ford (F) and General Motors (GM), further strengthen Tesla’s network accessibility for their customers.
The competition from Tesla’s well-established charging infrastructure raises concerns about the market space available for Blink. The company reported its first-quarter earnings, falling short of analysts’ expectations with revenue at $21.67 million and an EPS loss of 49 cents per share, compared to anticipated figures of $22.05 million and an EPS loss of 46 cents. As a result, BLNK stock has experienced a decline of 44% this year.
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American Lithium (AMLI)
American Lithium is an exploration-stage mining company with a history dating back to 1974, when it operated under the name Menika Mining before rebranding in 2016. Despite its lengthy track record, American Lithium has not achieved significant success. Over the past ten years, the company has not generated any revenues, and prospects for near-term revenue generation appear unlikely.
Moreover, the company has come under scrutiny from short sellers who have raised serious allegations. These include concerns about undisclosed related party deals, potential stock promotion activities, and insiders facing scrutiny from securities regulators.
What makes matters more concerning is that despite the lack of revenues and the presence of potential red flags, AMLI stock currently boasts a market capitalization of over $400 million. This valuation raises doubts about the company’s financial viability and presents a cautionary signal for investors.
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Boeing (BA)
At first glance at Boeing’s chart, it might appear that the share price is recovering, up 8.5% this year. But zoom out, and you will see that Boeing is still trading 42% below where it was five years ago.
Higher inflation in recent years has increased Boeing’s costs, which saw its G&A expenses surge 51% in Q2. Supply chain issues also weighed on the operating margin expansion. The commercial aircraft manufacturer saw a sharp decline in operating margin from -3% in 2019 to -22% in 2020 due to the impact of the pandemic, and it has struggled to recover to -5% in 2022.
The underperforming stock has been plagued with long-term problems, and multiple high-profile crashes that the commercial aircraft manufacturer would rather put behind them haven’t inspired any confidence. Most recently, technical issues forced the company to halt deliveries of some of its marquee 737 MAX airplanes. Considering all of this, we’re sticking to the sidelines for BA.
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