3 Stocks to Get Rid of Now

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sharks-circling-netflix-sell-185Believe it or not, the end of the year is sneaking up on us. There are less than two months until we ring in 2012, and now is the perfect time to reassess your portfolios and prepare for the year ahead.

The fourth quarter is a pivotal time for investors — as it is seasonally the best time of year for stocks and brings the biggest gains. This is why you must be sure that your investments are in the best condition they can be. The best way to do that is by being certain that your portfolio contains top-rated and performing stocks.

Here are three well-known stocks that you might not realize you should stay away from.

No More Love for Netflix

In just a few short years, Netflix (NASDAQ:NFLX) has become a powerhouse in the movie industry. The company revolutionized the way people watched movies.

First, the movie-service offered a low-fee monthly subscription service that allowed subscribers to create their own list of must-see movies and have titles delivered straight to their door. The service saved people from the hassle of having to go out and rent movies and, better yet, eliminated late fees by allowing subscribers to keep a movie as long as they wanted and by providing a return envelope.

Then, the company went virtual by adding an online movie library. In addition, subscribers could just turn on their computer and stream thousands of titles online instantly.

Things were all well and good for the company and stock until Netflix began raising monthly rates and subscribers started to leave.

Recently, although NFLX earnings jumped 63% in the third quarter, a loss of 800,000 subscribers and a weak company outlook for the fourth-quarter sent investors running.

In the hours following Netflix’s report, the stock plunged 27%, falling below the $100 mark for the first time in over a year.

In the two weeks since reporting earnings, NFLX has struggled to regain a positive footing. With the analyst community predicting a 31% drop in earnings for the company in the fourth quarter, now is definitely the time to get out of NFLX, if you haven’t already.

Now let’s take a look at an electronics company that’s in hot water.

Sony: A Stock With No Fundamental Strength

Sony (NYSE:SNE) is one of the biggest names in electronics and entertainment. The company has its hand in everything from manufacturing televisions and video games to producing movies and television programs.

Unfortunately for the company, just because nearly anyone you ask can say that they’ve played, watched or used a Sony product in some form, doesn’t make it a solid investment.

Understandably, the earthquake and tsunami that devastated Japan — where Sony is headquartered — earlier in the year did have a negative impact on business. However, that one event cannot be blamed for Sony’s weak fundamentals across the board.

The company reported a disappointing yearly forecast last week. Instead of a previously predicted 60 billion yen ($77.2 million) profit for the year, Sony now expects a 90 billion yen ($1.15 billion) net loss. The massive loss is accredited to a large drop in television sales. The company also trimmed its sales outlook for cameras, computers and DVDs.

All in all, SNE isn’t a smart investment to be making.

Next up is a car company that is running low on gas.

An Auto Play with No Get-Up-and-Go

Honda Motor Co. (NYSE:HMC) has become a favorite for its reliable and cost-effective vehicles. Unfortunately, the same can’t be said of its stock.

Like Sony, Honda’s poor earnings, sales growth and momentum show very little potential for the stock.

The company recently reported its fiscal second-quarter earnings, which didn’t go over well with investors. In the latest quarter, Honda’s profits fell 56% while quarterly sales sank 16.3% — including more than 22% in North America.

The company’s production has been hit hard this year. First by the massive tsunami in March and now by flooding in Thailand. Between natural disasters and the recent surging of the yen, Honda is one of many Asia-based companies whose business has been battered, and it looks like it will be a long road to recovery for the automaker.

For the full-year, the analyst community expects HMC to post a 45.5% loss in earnings.

While Honda attempts to play catchup, you should be wary of adding the position to your portfolio.

It’s important that you regularly weed out the positions that aren’t adding any money from your portfolio. And you should never buy or hold onto a stock simply because it’s a company everyone has heard of. Maintaining a profitable portfolio is all about investing in stocks that have strong fundamentals and big growth potential.


Article printed from InvestorPlace Media, https://investorplace.com/2011/11/nflx-sne-hmc-stocks-to-sell-now/.

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