The stock market gained an astonishing $7.6 trillion during the pandemic. Incredibly, just 19 stocks accounted for half of those gains. It was a great year for investors, but it was unlike any other year the stock market has ever seen — and now it’s over. That means it’s safe to bet that at least some winners and losers will trade places as things get back to normal.
You don’t want to head into the summer with your portfolio carrying dead weight, so it’s time to say goodbye to a few of the stocks that made sense before, but might not now that the weather is finally starting to break and the economy is moving back to something recognizable.
There’s no substitute for professional financial advice, but if you’re still holding any of the following 10 stocks, it might be time to reconsider.
Last updated: June 8, 2021
Nielsen Holdings PLC (NLSN)
Known for its TV ratings data, Nielsen long delivered information that was absolutely critical for both television producers and advertisers alike. As more and more cords are cut every day, and as TV advertising revenue continues to plummet, Nielsen ratings are beginning to look like a 20th-century business model that’s quickly going the way of Sears. It’s no secret that Netflix and other streaming giants soared during COVID-19. As Kiplinger points out, Netflix and the rest can track their own viewing data without any help from Nielsen, which will soon be selling an obsolete service.
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Harley’s stock has been on a downward slide for years as the mostly male baby boomers who rode Harley to that status of legend age out of the company’s core product. There was a resurgence during the pandemic as motorcycles offered an alternative both for open-air travel and distanced socialization. The pandemic, however, is over. Regular travel is back and Hogs are still big, loud, expensive gas-guzzlers that younger generations aren’t interested in. Like Neilsen, Harley-Davidson is a yesteryear relic that hasn’t given its investors a lot of reasons to be optimistic moving into the 2020s.
Peloton emerged as one of the superstars of COVID-19 when gyms closed across the country. Its stock was trading above $170 when it peaked in January, but then it lost half its value when it plummeted to the low $80s.
Peloton isn’t a lost cause — it’s back up over $100 now — but cheaper competitors have made the expensive Peloton model unnecessary for the average person. Adding to that was a scandal involving dozens of injuries to children and one ghastly child death that caused the Consumer Product Safety Commission to request a recall. Peloton fumbled by initially fighting the request before backing down in the face of public outcry. In short, Peloton’s market is shrinking just as credible competitors are emerging, and the brand is now synonymous with unsafe products and a sketchy corporate culture.
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Simon Property Group (SPG)
Many investors saw the writing on the wall before now, but if you still have a position in SPG, consider looking for an exit. SPG had long been one of the most trusted names in commercial REITs, but it was already suffering from store closures in its malls before the pandemic hit. The virus-induced acceleration of e-commerce created even more brick-and-mortar pain. Now, the once-reliable SPG is a top contender when it comes to jettisoning underperforming stocks from an otherwise healthy portfolio.
Less than a month ago, the price of a share of AMC stock had fallen below the price of a movie ticket. The theater giant was crushed by COVID-19, but there were hopes that upon reopening, the country would be eager to get back to normal and do things like go to the movies. In the last week, AMC stock climbed, but the smart money says it’s a meme stock bubble. AMC’s balance sheet is ugly and its debt is sky-high, but more than anything, it joins Harley-Davidson and Neilson in suffering from a 20th-century business model that was already in trouble before the pandemic hastened what appears to be an inevitable decline.
The world became one big Zoom call when the pandemic set in and by October 2020, the video-calling stock was approaching $600. Today, it’s back down under $350. Zoom served a niche need until it became the staple of COVID-19 communication. Now that masks are coming off, offices are filling back up, and classrooms are, well, returning to the classroom, demand for Zoom is contracting back to what it was before the virus turned it into a pandemic all-star.
Tesla stock was trading above $900 for a brief moment in January. Today, it’s barely clinging to $600. Tesla is by no means a company in trouble — it continues to innovate and deliver — but it’s also no longer the only game in town. Tesla started the trend toward electric, but the arrival of the fully electric Ford 150 put the big boys of the auto industry on notice — if they don’t fully commit to a fully electric future, they won’t be the big boys much longer.
In short, Tesla is a victim of its own success. The trend it started is now so undeniable that the major auto manufacturers with the money, reach and infrastructure to dominate have already begun to flood a market that was once cornered by Elon Musk.
Legalized sports betting is sweeping the nation and DraftKings is one of the biggest names in the online gambling world. The stock took off in 2020 as bored shut-ins who weren’t normally gamblers took up sports betting to pass the time. Casinos are reopening now and while analysts believe DraftKings is on the road to profitability, it’s still operating at a loss — just as it was in 2019, just as it was in 2020 and just as it’s expected to through 2022. It’s currently trading in the low $50s, down from the low $70s in March. Whether you have gains to harvest or losses to cut, now might be the time.
Thanks to a legendary Reddit-based short squeeze, GameStop was without question the biggest stock story of the pandemic, but that drama isn’t why investors should consider selling — it’s simply time to harvest some gains. Shares are well up over 1,000% on the year, a fact that Investors Business Daily considers as proof of a classic “climax run.” Yes, the wild short squeeze blessed GameStop with enough cash to eliminate much of its crushing debt, but many analysts predict volatile times ahead — GameStop, in short, is probably at or close to its peak right now.
Xerox was trading around $15 during its lowest point after the 2020 crash. It has clawed and scratched its way back to around $24, but investors who are hoping for a return to the glory days should think with their heads and not with their hearts. The company’s huge losses can be traced mostly to cratering demand for office printers. There were hopes that the return to full offices might change that. However, Barron’s is just one of many publications advising that even if offices do return to peak capacity, Xerox stock likely won’t be going along for the ride.
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