Stocks to sell

While the U.S. equities may have an upward bias, valuation adjustments don’t materialize in a perfectly linear fashion, which brings us to the topic of top stocks to sell now. At some point, astute investors must realize when to call it quits. Even the most well-researched opportunities can fall short. Maturity is realizing when you’re wrong and taking decisive mitigatory action.

Of course, when discussing enterprises to dump, the topic generates intense heat for the editorialist. In this case, though, the below list centers on stocks to avoid according to strategists. Put another way, these aren’t my ideas for high-risk stocks to sell. Rather, some of the finest Wall Street experts believe you should cut your losses. One advantage of heeding analysts’ opinions is that these folks are professionals. Yes, they sometimes get calls wrong – who doesn’t? However, their education, experience, and acumen may end up saving your hind end. Below are strategists recommended stocks to sell.

PFG Principal Financial Group $66.98
CLX Clorox $158.62
BEN Franklin Resources $24.42

Principal Financial Group (PFG)

Source: shutterstock.com/Black Salmon

Hailing from Des Moines, Iowa, Principal Financial Group (NASDAQ:PFG) is a global financial investment management and insurance company. According to its public profile, Principal helps people and companies across the world build, protect, and advance their financial well-being through various services. Of course, it’s a bit of an ironic statement given that, by the books, PFG is one of the top stocks to sell now.

I’m not making such an assessment flippantly. For one thing, PFG slipped nearly 22% since the beginning of this year. Worse yet, in the trialing month, the downside accelerated sharply, with PFG losing almost 12%. However, it’s really the Wall Street analysts that consider PFG to be one of the high-risk stocks to sell.

According to TipRanks, Principal Financial shares carry a consensus view of moderate sell. To be fair, the experts have an average price target of $75.55, implying over 15% upside potential. Nevertheless, within the past seven months, not a single analyst assigned PFG as a buy.

Financially, many investors are likely taking a dim view of Principal’s quarterly revenue trend, which has been sharply declining sequentially since the second quarter of 2022. Therefore, PFG is one of the stocks to avoid according to strategists.

Clorox (CLX)

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Based on the fundamentals, household goods giant Clorox (NYSE:CLX) doesn’t seem a natural candidate for top stocks to sell now. As the manufacturer of trusted bleach and cleaning products, Clorox hardly rates as a sexy investment. At the same time, you can’t go through life without needing the underlying product categories. Since everyone knows the Clorox brand name, it should make for a safe buy.

Indeed, the charts seemingly confirm bullish sentiment, with shares up over 11% since the January opener. Despite the relevance, CLX is actually one of the strategists’ recommended stocks to sell. Per TipRanks, Wall Street analysts peg CLX as a moderate sell. Even worse, the average price target lands at $150.93, implying almost 5% downside risk.

Out of 16 experts within the past three months, only one analyst – Raymond James’ Olivia Tong – views CLX as a buy. The others view shares as either a hold (five ratings) or sell (10 ratings). Contributing to pensiveness for CLX is the valuation. Currently, CLX trades at nearly 273-times trailing earnings and over 29-times forward earnings. Both stats rank worse than at least 80% of the competition. Sadly, then, CLX qualifies as one of the best stocks to sell due to market jitters.

Franklin Resources (BEN)

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Headquartered in San Mateo, California, Franklin Resources (NYSE:BEN) makes a case for top stocks to sell now because of fading pertinence. A global investment management firm serving clients in over 165 countries according to its public profile, Franklin, unfortunately, suffers from rising economic concerns. From stubborn inflation to spiking interest rates to debt ceiling drama (among other headwinds), the investment sector courts serious challenges.

In turn, investors don’t have much confidence in BEN. Since the beginning of this year, shares stumbled more than 11%. Sadly, such magnitude of red ink means that Franklin shares rank among the stocks to avoid according to strategists. Presently, the Street pegs CLX as a consensus moderate sell. Even more ominous, the average price target sits at $22.79, implying slightly over 5% downside risk.

Tellingly, out of seven experts covering BEN in the past 90 days, not a single one rated shares a buy. Instead, we have three holds and four sells. And the latest price target is the worst at $20, implying nearly 17% downside risk. In particular, Franklin incurs declining gross and operating margins. Also, its Altman Z-Score is 1.64, implying distress.

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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