3 Stocks You Must Sell Before June to Avoid Major Losses

Stocks to sell

If you’re on the fence about which stocks to sell as we head into June, keep reading. Three equities stand out in the present market and should be sold before June to prevent potentially significant losses. These businesses are all dealing with issues that might jeopardize their capacity to develop and maintain a stable financial position.

To begin with, the first needs to improve with notable drops in comparable and overall sales. Comparing the company’s net sales to the prior year, there was a sharp decline. This ongoing decrease reflects deeper problems with the company’s market strategy and customer demand.

Meanwhile, the second one has trouble with diminishing revenue in its consumer cannabis market despite demonstrating success in other divisions. The segment’s declining revenue makes a smaller contribution to the total revenue. This is in addition to the company’s deliberate move into medical markets with better profit margins. 

Lastly, the third company is grappling with scalability and operational capacity challenges. Its ambitious goals to expand flying frequency and capacity and high ticket costs pose significant risks. Further, developing and manufacturing its new spacecraft comes with substantial time and cost risks, adding to its financial instability.

Stocks to Sell: Big Lots (BIG)

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The stable drop in top-line suggests that Big Lots (NYSE:BIG) faces serious headwinds. The Q4 2023 declines in net sales of 7.2% year-over-year (YOY) and comparable sales of 8.6% YOY indicate fundamental problems with market demand and competition. Similarly, the overall sales loss of 13.5% YOY points to a larger, continuous pattern of diminishing revenue. This downward trend implies that the company’s numerous endeavors to boost sales have yet to pay off entirely. A mix of internal variables like product assortment and price tactics may remain the issue. 

Moreover, in Q4, the company shuttered 39 locations and only created three new ones. It ended Q4 with 1,392 locations and 32.3 million square feet of gross sales space. One real obstacle to top-line growth is the decrease in the number of stores. Big Lots is decreasing its physical presence and, as a result, its potential market reach by shutting more shops than it is opening. Thus, the 2.9% negative effect shows how this reduction directly affects sales growth. Finally, maintaining or growing a shop presence is generally essential for a retailer to continue growing its revenues.

Aurora (ACB)

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Net cannabis sales for consumer use at Aurora (NASDAQ:ACB) dropped from $14.6 million in Q3 2023 to $11.6 million in Q3 2024. This translates to a decrease of about $3 million from Q3 2023, or around 20.5%. Even while overall net sales increased to $64.4 million, the consumer cannabis segment’s decline contrasts sharply with other sectors’ development, such as the international medical cannabis section, which saw a 41% boost.

Moreover, a declining consumer cannabis market suggests that the recreational cannabis business may have trouble maintaining or growing its market share. This industry is important because cannabis companies that cater to both the medical and recreational sectors usually make a sizable profit from it. Hence, the declining revenue indicates changing consumer preferences, pressure from competitors, or other factors in the industry demand that Aurora is losing edge on.

Overall, the cannabis industry’s growth profile is not consistent. If certain sectors thrive while others decrease, the sustainability of overall growth may be jeopardized. Therefore, Aurora’s brand strength and long-term market placement might be affected if it loses ground in its consumer growth.

Virgin Galactic (SPCE)

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Virgin Galactic’s (NYSE:SPCE) estimated revenue of $3.5 million for the second quarter of 2024 is quite low, considering the substantial costs and investments required for operations and development. The first two Delta ships will generate an estimated $450 million in income annually, although this revenue prediction is contingent upon two undefined factors: high flight frequency and ticket price.

According to the firm, the average price per ticket for the ‘Galactic 07’ Mission is over $800K, the highest price yet. It is anticipated that future prices will be about $600K per seat. The possibility of long-term profitability may be impacted by the premium character of space tourism, which might narrow the clientele. The Delta class spacecraft program is still in the design, tooling, component production, and final assembly stages, which is scheduled to enter commercial service in 2026

Finally, any stage delays might cause operating schedules and income generation to slip. Each Delta ship may cost between $50 and $60 million to construct. Hence, these expensive initial investments demand a lot of cash upfront, further taxing available funds.

On the date of publication, Yiannis Zourmpanos did not hold (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.

Yiannis Zourmpanos is the founder of Yiazou Capital Research, a stock-market research platform designed to elevate the due diligence process through in-depth business analysis.

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