Smart investors know that knowing when to sell is just as important as knowing what to buy.
While most financial media focuses on stocks to purchase, we look for companies facing serious problems that might make them worth selling. These aren’t just stocks that are temporarily underperforming – they’re businesses facing real challenges with their operations, finances, or that are simply overvalued.
We don’t make recommendations based on short-term price movements or news headlines. Each company on this list has been carefully analyzed using multiple factors that often predict significant price drops.
Good portfolio management means both buying and selling at the right time. Often, the best decision is to move your money away from troubled positions before problems show up in the stock price.
Current Sell Candidates:
Landstar System (LSTR)
Landstar System has announced a troubling delay in its first-quarter earnings release, pushing it from April 29 to May 13 due to what the company calls “a supply chain fraud that does not involve its core North American truckload services.” While management has estimated the damage at approximately $15 million to net income ($0.43 per share), the need for a formal notification of late filing with the SEC suggests this situation could be more complicated.
The stock dropped 3.44% on the announcement day while the broader market gained, showing investors are concerned about potential governance issues. Shares currently trade at $135.11, down from a 52-week high of $194.54 but still valued at $5 billion. Trading volume has jumped to 658,922 versus the 367,004 average, suggesting larger investors are already repositioning ahead of possible additional revelations. The company’s thin 12.96% profit margin leaves little room to absorb financial impacts beyond the initially estimated $15 million, while the small 1.04% dividend yield offers minimal compensation for the increased risk.
The mere mention of fraud should raise serious red flags for investors, especially since the company has provided limited details about the nature of the fraud, its full scope, and how it went undetected until now. Although Landstar preemptively reported revenue of $1.15 billion and non-adjusted earnings of $0.95 per share (near the top end of guidance), history shows that accounting irregularities often lead to additional revisions later on.
Old Dominion Freight Line (ODFL)
Old Dominion Freight Line is showing growing signs of industry-wide problems in the less-than-truckload (LTL) sector. Shares recently fell 7.70% amid concerns about weakening demand and pricing issues. The company’s first-quarter results revealed a 5.8% revenue decline to $1.37 billion, an 11% drop in earnings per share to $1.19, and a 6.3% decrease in tonnage per day. Management specifically mentioned “ongoing softness in the domestic economy” as a factor.
What makes ODFL’s situation particularly concerning is how competitors like Saia appear to be prioritizing market share over profitability – a classic sign of deteriorating industry conditions. Saia’s disappointing results, featuring sharply lower profits despite modest revenue growth, triggered sympathy selling in ODFL shares. The stock currently trades at $146.67, down significantly from its 52-week high of $233.26 and approaching its low of $144.90. Trading volume has increased to 4,094,902 shares versus the 2,013,779 average, suggesting institutional investors are speeding up their exit.
While the company’s 32.76% profit margin provides some cushion, this advantage could quickly erode if price competition intensifies. With freight volumes likely to remain under pressure from trade uncertainty and the potential for further margin compression, Old Dominion appears vulnerable to additional downside.
Opendoor Technologies (OPEN)
Opendoor Technologies is showing serious vulnerabilities in today’s cooling housing market. The company’s shares fell 23% last week after reports that existing-home sales dropped 5.9% in March compared to February – the slowest pace since 2009. This data is particularly problematic for Opendoor because the company actually purchases, renovates, and sells homes directly, creating significant inventory risk as the housing market cools.
The company faces growing challenges as revenue fell 26% in 2024 to $5.2 billion and net losses widened to $392 million. These problems come while mortgage rates remain around 6.8%, median home prices have increased 27% over five years to $416,900, and consumer confidence in the economic outlook has hit a 12-year low. Opendoor’s stock now trades at just $0.76, down dramatically from its 52-week high of $3.09 and approaching its low of $0.72. Its market value has collapsed to $553 million despite generating billions in revenue. Extremely high trading volume (127.6 million shares versus the 47.3 million average) suggests investors are rushing to exit positions.
With very thin 8.40% profit margins providing minimal protection against housing price declines, no dividend support, and growing consumer hesitation to make major purchases, Opendoor appears highly vulnerable to further decline.
Bottom Line
This week’s featured stocks highlight how economic uncertainty is affecting different sectors – from Opendoor’s direct exposure to a cooling housing market, to competitive pressures in Old Dominion’s freight business, to potential governance issues at Landstar.
In each case, the initial market reaction may not fully reflect the magnitude of these challenges. As economic headwinds intensify and corporate vulnerabilities become more apparent, these stocks face significant risk of additional downside that investors should carefully consider before the problems fully materialize in future quarters.