The Standard & Poor’s 500 index, commonly referred to as the S&P 500, is a floated weight index used to assess the overall performance of the U.S. stock market. For many investors, simply investing in an S&P 500 index fund is enough to set themselves up very well for retirement as it doesn’t require constant management to succeed.
However, if you’re an investor who likes individual picks, then it’s important to know which S&P 500 stocks to sell to avoid losses. These stocks have been selected based on their midterm to long-term prospects dwindling as a result of financial insolvency.
They might do so poorly that they end up removed from the index altogether.
That means getting out of these positions at the right time can maximize returns while minimizing losses. As such, here are three S&P 500 stocks to sell before overvaluation or panic brings them down.
Boeing (BA)
When a company is facing felony fraud charges and must choose between a plea deal or a criminal trial, it’s a safe bet that selling its stock is a good idea.
That’s because neither direction is a good one for Boeing (NYSE:BA), which continues to waste away week after week on the market. The trend is almost unimaginable for one of America’s most important manufacturing giants and defense companies.
With the U.S. Department of Justice now breathing down the company’s neck, a plea deal seems likely to avoid even more incriminating investigations during a criminal trial over its two 737 MAX crashes in 2018 and 2019. Even more concerning, Boeing’s Starliner is still stuck in space, due to technical errors. The craft was supposed to be a silver lining for the company’s image but its astronauts still have not been brought back.
This performance pales in comparison to companies like Airbus (OTCMKTS:EADSY) and SpaceX, which have far outpaced Boeing in their respective categories. As such, investors should certainly consider BA among S&P 500 stocks to sell.
Charter Communications (CHTR)
More commonly known to consumers as Spectrum, Charter Communications (NASDAQ:CHTR) has had one of the worst performances among S&P 500 stocks to sell so far this year. The company has announced it will be closing call centers and conducting layoffs in six different states.
This may be part of a broader strategy to cut customer service costs and improve profitability. While these layoffs will likely boost the company’s stock in the short term, they will invariably impact employee morale and long-term growth.
Time will tell, but a good moment to sell CHTR stock would be following a layoff announcement, as a way to profit from the spike after the current six-month-long dip the company has gone through. This is especially true when looking at the bigger picture of Spectrum’s performance against telecom giants like T-Mobile (NASDAQ:TMUS) and streaming giants like Netflix (NASDAQ:NFLX).
VF Corp (VFC)
The market potential for an apparel company like VF Corp (NYSE:VFC) looks somewhat limited. With subsidiaries like The North Face and Dickies, the company covers outerwear and workwear, while it contributes to streetwear trends through its ownership of Supreme, Timberland and Vans.
Considering this portfolio, one would think VFC should have no problem with generating revenue. That’s because many of its brands are considered both culturally relevant and practical in their respective markets. Yet, its net income for the first quarter of 2024 came in at a stunning loss of $418 million.
This has contributed to the stock’s 31% loss in value year-to-date. Should the broader market and indexes face a correction by the end of the year, VFC stock should be on your list of S&P 500 stocks to sell.
On the date of publication, Viktor Zarev did not have (either 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.