Dump these stocks now.
The right stocks can make you rich and change your life.
The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.
They’re pure portfolio poison.
Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.
That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.
I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.
But first, if you own any or all of these “toxic stocks,” sell them today…
Moderna (MRNA): Challenges Persist Amid Revenue Decline
Moderna (MRNA) shareholders have endured a challenging year, with the stock down roughly 79% since last May. Despite a promising pipeline, the company’s near-term outlook raises significant concerns.
Key Issues:
- Revenue Decline: 2024 revenue guidance narrowed to $3–$3.1 billion, and 2025 projections are even bleaker at $1.5–$2.5 billion, representing a potential 50% drop.
- Fierce Competition: Moderna’s RSV vaccine, mRESVIA, is playing catch-up against Pfizer and GSK, both of which had a head start in the U.S. market.
- High Burn Rate: Despite reducing operating expenses, Moderna burned through $2.7 billion in the past year.
Outlook:
While Moderna has $9.5 billion in cash and an active vaccine pipeline, including its next-generation COVID-19 vaccine and an RSV vaccine expansion, vaccine sales remain highly volatile. This stock carries considerable risk, especially for conservative investors.
Hims & Hers Health (HIMS): Challenges on the Horizon
Hims & Hers Health (HIMS) had an exceptional 2024, with its stock soaring 172%. However, recent developments suggest investors may need to reconsider its long-term prospects. The stock has already dropped around 15% in the past month, signaling potential trouble ahead.
Key Concerns:
- GLP-1 Growth Threatened: Hims & Hers has benefited from offering compounded versions of high-demand GLP-1 drugs like Ozempic and Wegovy due to shortages. However, these shortages may soon end, which could remove a key growth driver.
- Regulatory Risk: Compounded drugs are not FDA-approved, adding an element of uncertainty to this revenue stream.
- Rising Competition: Telehealth is a growing space with increasing competition, potentially pressuring margins and customer acquisition.
Outlook:
While Hims & Hers has shown impressive growth, its reliance on short-term opportunities like compounded GLP-1 drugs raises concerns about sustainability. Investors should be cautious as the company’s growth prospects face headwinds.
Quantum Computing (QUBT): Speculative and Overvalued
Quantum Computing (QUBT) has seen an astronomical rise—up 2,400% in just three months—driven by excitement around AI and quantum computing. However, the fundamentals tell a different story, making this stock a high-risk play.
Key Concerns:
- Questionable History: The company has pivoted multiple times since 2001, from selling inkjet cartridges to beverages, and now quantum computing. This pattern raises concerns about its strategy and credibility.
- Weak Financials: With just $386,000 in trailing 12-month revenue, QUBT’s price-to-sales ratio sits at an eye-watering 5,400—far above even the most aggressive tech valuations.
- Dilution Risk: The company raised $14.6 million through secondary offerings in 2024 and may issue more shares, diluting existing shareholders.
Outlook:
While quantum computing holds promise, QUBT’s minimal revenue, high cash burn, and speculative nature make it a risky bet. Investors seeking exposure to this emerging field would be better served by more established players with stronger fundamentals.