Stocks to sell are those that are underperforming and not meeting investors’ expectations. Or, investors may sell stocks because they believe the stock’s future performance is poor. Other times, investors may want to sell the stock to minimize losses and invest elsewhere, or even free up capital. The following are three stocks to sell if you are considering cleaning up your portfolio. As with any investment, the decision to sell will depend on your risk appetite and investment profile.
| XRX | Xerox | $16.38 |
| MARA | Marathon Digital | $6.10 |
| SI | Silvergate Capital | $5.23 |
Xerox (XRX)
Xerox (NASDAQ:XRX) has struggled in recent years due to various factors. Before the pandemic, the company faced challenges from the shift towards paperless workplaces and the consequent decline in demand for its imaging equipment. The COVID-19 pandemic further exacerbated this trend, with more people working remotely and relying on digital tools.
Xerox’s poor performance can be attributed to a combination of factors, including market shifts, supply chain disruptions, and inflation. The company must adapt to these challenges and find new ways to generate revenue to turn its fortunes around.
The company achieved revenue of $1.94 billion in the fourth quarter, a 9.2% year-over-year increase or a 13.9% increase in constant currency. The adjusted EPS was $0.89, up $0.55 year-over-year, and the adjusted operating margin was 9.2%, up 440 basis points year-over-year.
However, Xerox encountered several macroeconomic challenges in Q3, resulting in flatter-than-anticipated sales, a significant decline in earnings, and negative free cash flows. It marked the third consecutive quarter in which Xerox failed to meet Wall Street’s estimates. Xerox’s recovery path will require a concerted effort to overcome its challenges. Moreover, it faces secular headwinds that are difficult to counter at this stage. While management remains optimistic about future opportunities, the company must make significant efforts to recover from these setbacks. It is tough to see the company making a huge comeback right now. Hence, it has landed on this list of stocks to sell.
Marathon Digital (MARA)
Marathon Digital (NASDAQ:MARA) is a Bitcoin (BTC-USD) miner. Unfortunately, the company has faced its fair share of challenges with recent pullbacks in cryptocurrencies. As a result, company revenues and profits were impacted by the decreased demand for crypto. In addition, the cost of mining cryptocurrencies has increased due to the increasing competition and the need for specialized equipment.
To combat these challenges, Marathon Digital Holdings is looking to diversify its offerings by exploring other areas of the blockchain ecosystem. However, it remains to be seen if the company can successfully navigate the challenges of the current crypto market and emerge stronger. In addition, MARA recently produced fewer Bitcoin in Feb. of 683. That was a slight decrease of 0.6% from Jan. It also sold 650 Bitcoin to cover operational expenses and general corporate use. This marked the first time in a while that the mining firm had sold any of its holdings, which is not a positive sign.
Furthermore, earlier this year, Marathon announced that it would be revising certain of its financial results for 2021 and 2022 due to accounting errors. These difficulties have raised concerns about the company’s financial stability and performance.
Silvergate Capital (SI)
Crypto-focused lender Silvergate (NYSE:SI) has seen better days. Last Thursday, shares of Silvergate Capital, the parent of crypto-friendly Silvergate Bank, fell 29% in pre-market trading after it delayed filing its annual report and said it was evaluating the concerns about its ability to operate as a going concern. Silvergate won’t meet its March 16 deadline for its annual report and has sold more debt securities to repay debts this year. The company also said it may not be well-capitalized due to recent events. Furthermore, the firm is currently assessing the impact of these events on its ability to operate as a going concern.
Prominent cryptocurrency companies like Coinbase (NASDAQ:COIN) and Galaxy Digital (OTC:BRPHF) decided to drop Silvergate as their banking partner after it raised some questions about its financial stability. More recently, Silvergate Capital Corp halted its crypto payments network due to concerns about its sustainability. The bank, which focuses on digital assets, announced on Friday that it was discontinuing the Silvergate Exchange Network, one of its most popular offerings.
Meanwhile, the company’s transactions with FTX and trading firm Alameda Research are undergoing federal investigation in Washington. In Jan. Silvergate received inquiries from three U.S. senators regarding its risk management and FTX.
On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.