June 25, 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.
Enphase Energy (ENPH)
Enphase Energy’s devastating 20% weekly decline shows how quickly legislative changes can undermine entire investment theses for companies dependent on government incentives. The solar inverter manufacturer faced a perfect storm when the Senate Finance Committee recommended accelerating the phase-out of green energy tax credits to 2028 instead of the previously planned 2032 timeline. This four-year acceleration in the elimination of crucial industry support mechanisms represents a fundamental shift in the operating environment that could permanently impair demand for Enphase’s micro-inverter products.
The market’s reaction reflects recognition that Enphase’s business model has become increasingly dependent on artificial government stimulus rather than natural economic demand. KeyBanc analyst Sophie Karp’s downgrade to underweight with a $31 price target (below current levels) acknowledges that while tax credits aren’t the “be-all and end-all” of solar business, their removal eliminates a critical competitive advantage for residential solar installations. The company’s 46.95% profit margin, while impressive, may not be sustainable if forced to compete purely on economic merit without government subsidies.
At $35.84, approaching its 52-week low of $33.01 and down dramatically from its high of $130.08, Enphase has already lost substantial value as investors anticipate challenging industry conditions. The company faces multiple headwinds beyond just tax credit elimination: high system costs, intense competition from international manufacturers, and a residential solar market that may struggle without artificial incentives. Trading volume below average levels suggests many investors remain unaware of the legislative developments’ full implications. For investors still holding positions, the combination of accelerated subsidy elimination, competitive pressures, and technical breakdown creates a compelling case for immediate reconsideration. While renewable energy remains a long-term growth theme, Enphase appears particularly vulnerable to the transition away from government-supported adoption toward purely market-driven demand, a shift that may reveal fundamental weaknesses in the residential solar value proposition.
Redwire (RDW)
Redwire’s nearly 17% weekly decline reflects investor concerns about a company pursuing aggressive growth strategies through dilutive financing and expensive acquisitions that may destroy shareholder value. The space exploration equipment specialist announced a secondary offering of over 15.5 million shares at $16.75 each, raising approximately $260 million while substantially diluting existing shareholders. This represents more than a 10% increase in the outstanding share count from the current 142.6 million shares, creating immediate downward pressure on per-share metrics even before considering the deployment of proceeds.
The timing and scale of this capital raise is particularly concerning given Redwire’s simultaneous completion of the $1.1 billion Edge Autonomy acquisition from Sleeping Bear Capital. This UAV developer acquisition, while strategically positioned in the growing defense technology market, represents a massive bet for a company with a market value of just $1 billion. The acquisition price essentially doubles Redwire’s enterprise value, raising questions about integration risks, cultural fit, and whether management can successfully deploy this scale of capital efficiently.
Trading at $15.91, down from a 52-week high of $26.66, Redwire’s technical picture shows a stock under persistent pressure despite the broader space industry’s positive momentum. The company’s thin 13.93% profit margin provides minimal buffer against integration costs or operational challenges from the Edge Autonomy acquisition. While management frames the capital raise as necessary for “balance sheet strengthening” and debt retirement, the combination of massive dilution and a transformational acquisition creates multiple execution risks. For investors, the mathematical reality is sobering: even if the Edge Autonomy acquisition proves successful, the dilutive financing means shareholders will own a smaller percentage of any future success. This represents a classic situation where growth-at-any-cost strategies may benefit management more than shareholders, suggesting prudent investors should consider exiting before potential integration challenges materialize.
Digital Turbine (APPS)
Digital Turbine’s dramatic 14.61% Friday collapse demonstrates how quickly geopolitical risks can overwhelm positive fundamentals for companies with significant exposure to volatile regions. Despite posting better-than-expected quarterly results earlier in the week that initially drove shares higher, the adtech specialist succumbed to mounting concerns about U.S.-China technology restrictions and escalating Middle East tensions. The Trump administration’s push to strengthen export restrictions on chipmaking technologies, particularly targeting companies like Samsung and Taiwan Semiconductor’s Chinese operations, creates direct headwinds for Digital Turbine’s business model.
The company’s fundamental vulnerability lies in its heavy dependence on Chinese markets for revenue generation, creating outsized exposure to geopolitical developments beyond management’s control. While Digital Turbine projects solid growth with revenue guidance of $515-525 million (6% annual growth) and adjusted EBITDA of $85-90 million (21% growth), these projections assume stable operating conditions that may prove overly optimistic. The extraordinary trading volume of 13 million shares versus the 5.2 million average suggests institutional investors are rapidly reassessing geopolitical risk exposure.
At $5.75, trading near the middle of its 52-week range of $1.18-$7.77, Digital Turbine’s $616 million market value reflects significant uncertainty about future operating conditions. The company’s 28.13% profit margin provides some operational cushion, but this advantage could quickly erode if geopolitical tensions force business model adjustments or market access restrictions. With escalating Israel-Iran tensions potentially drawing U.S. military involvement and technology export restrictions likely to intensify rather than ease, Digital Turbine faces persistent headwinds that could pressure both valuation multiples and operational performance. For investors seeking growth technology exposure, the combination of geopolitical vulnerabilities and volatile earnings patterns suggests considering alternatives with less geographical concentration risk.