May 14, 2025
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:
Wolfspeed (WOLF)
Wolfspeed’s 26.18% crash following earnings shows how quickly a company with heavy debt can spiral into crisis. While the silicon carbide chip manufacturer actually beat earnings expectations with a loss of $0.72 per share versus $0.82 expected, the company’s 2026 revenue guidance of $850 million dramatically missed analyst expectations of $958.7 million. This 11% guidance revision reveals fundamental problems with their silicon carbide adoption outlook, particularly in the EV market where demand has proven weaker than anticipated.
The company faces a dangerous combination of problems. Trading at just $3.27, down from a 52-week high of $30.86 (an 89% decline), Wolfspeed’s negative 12.43% profit margin shows they’re burning cash at an alarming rate. More concerning is the uncertainty surrounding $750 million in CHIPS Act funding that the Trump administration is now seeking to repeal. For a heavily leveraged company already struggling, this potential loss of capital access could be fatal.
The technical breakdown is clear, with volume exploding to 50.7 million shares versus the 27.4 million average, showing institutional panic selling. The combination of negative profit margins, mounting debt, potential loss of government funding, and a business model depending on EV adoption that isn’t happening as expected creates a scenario where Wolfspeed may be heading toward insolvency. At a market value of just $510 million but carrying billions in debt, this stock represents a classic distressed situation where further significant declines appear likely. Investors should exit positions immediately before the next potential catalyst triggers another leg down.
Krispy Kreme (DNUT)
Krispy Kreme’s 16.56% Friday crash reflects a business model that’s falling apart on multiple fronts. Two major analysts slashed their price targets within hours, with Evercore ISI dropping from $9 to $3 and Citigroup cutting from $4.75 to $3.60, following a disappointing Q1 earnings report that confirmed deep structural problems. The company’s paused partnership with McDonald’s, which represented a major growth strategy, has been indefinitely shelved while retail sector weakness threatens the 30% of revenues from retail outlets.
The company’s fundamental challenges are severe and getting worse. At $2.72 per share, down from a 52-week high of $13.10, Krispy Kreme has lost nearly 80% of its value in a year. While the stock offers a seemingly attractive 5.13% dividend yield, this payout appears increasingly unsustainable given the company’s worsening business conditions. With a market value now at just $466 million and profit margins of only 16.74%, the company has minimal financial flexibility to navigate the current difficult environment.
The massive volume surge to 31.9 million shares (nearly 7x the 4.7 million average) indicates widespread institutional selling. Krispy Kreme’s struggles appear symptomatic of broader consumer spending weakness, with no clear way forward. The combination of a collapsed growth strategy (McDonald’s partnership), sector problems in retail distribution, and analyst downgrades suggests this stock has entered a death spiral. For investors still holding positions, the dramatic analyst cuts and technical breakdown present a clear exit signal before further value destruction occurs.
MP Materials (MP)
MP Materials faces a serious threat to its business model as the ongoing U.S.-China trade war fundamentally disrupts its revenue streams. The rare earth mining company’s 8% Friday decline followed disappointing first-quarter results that saw losses deepen to $0.12 per share from $0.07 the previous year, while revenue of $60.8 million missed analyst estimates of $64.4 million. More critically, the company has halted shipments of rare-earth concentrates to China, which represented over 80% of its revenue last year – creating a massive hole in its business that won’t be easily filled.
The technical and fundamental picture is rapidly worsening. Trading at $21.96, down from a 52-week high of $29.72, the stock’s negative 32.93% profit margin reveals operational challenges even before the China issue appeared. With a $4 billion market value that appears increasingly difficult to justify given its customer concentration risk, MP Materials shows a small-cap company facing economic headwinds beyond its control. The exceptionally high trading volume of 11.6 million shares (more than double the 5.4 million average) suggests institutional investors are speeding up their exits.
The Chinese customer concentration problem isn’t just a temporary issue – it’s a fundamental flaw in the company’s business during an era of prolonged trade tensions. Finding alternative customers for such specialized products takes time and may require accepting significantly lower pricing, further pressuring already negative margins. With trade war tensions unlikely to ease under the current administration and the company’s primary market effectively cut off, MP Materials appears headed for continued deterioration. Investors should consider this an early warning to exit positions before the full impact of this business disruption becomes clear in upcoming quarters.
Bottom Line
This week’s featured companies show how different types of risks can quickly overwhelm businesses in vulnerable positions. Wolfspeed confronts a lethal combination of operational losses and balance sheet stress, Krispy Kreme struggles with a collapsing distribution strategy amid consumer weakness, and MP Materials faces customer concentration risk amplified by trade tensions. In each case, recent price declines reflect only the beginning of what could be much more severe fundamental deterioration. The extremely high trading volumes in all three stocks suggest institutional investors are rushing for the exits – retail investors should take note and follow suit before these situations potentially get much worse.