This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

4 Dead Money Stocks to Sell Now

NEW YORK ( TheStreet) -- Maneuvering this world as a long-term investor requires patience. On a weekly if not daily basis you're bound to watch some bearish analyst note take one of your holdings down. Most of the time these reports address near-term pressure that generally has little to do with a company's long-term story. That's when you buy on the dips: when you have confidence that the forward-looking narrative remains intact.

There are times you must cut and run. A stock becomes dead money because the trajectory is mired with uncertainty or, worse yet, the company adheres to an unworkable long-term strategy.

In this article, I review four stocks that fit into one or both of those categories. If you own these stocks, take a long hard look at selling them. If you decide to hold on or buy more, check yourself. Are you staying the course on the basis of some irrational emotional force or do you objectively believe the future looks bright?

J.C. Penney (JCP - Get Report). Cramer got it 100% correct:

The most nauseating thing about this conference call? Evidence of Johnson's hubris continued with the lack of any real humility about the dividend elimination, which is something older investors most definitely counted on. There was more touting of the changes he's putting through -- none of which look like they are working. He also said, "This is not a throwaway year. We expect to earn money this year -- good money."

Where did he get that from? Or how about that he says that the turn is 29% complete? Huh? That's a pretty amazing and precise prediction given how wrong he's already been
.

Of course, Cramer was referring to former Apple (AAPL) executive and current JCP CEO Ron Johnson on his company's Tuesday conference call.

This month I made similar comments. I had listened to Johnson's presentation to investors and analysts.

At the event, the CEO told a funny little story about Steve Jobs asking him if he was crazy when Johnson went to his house to tell him he was leaving Apple. Johnson opened himself up to random cognitive testing when he made the curious and convoluted case that when he left Target (TGT), the company, like Apple today, was on the top of its game. Now, Johnson claims he is leaving another thriving company to join a laggard that, without question, he will magically turn around.

I think we're seeing the Steve Jobs effect work in reverse. It's well known that Jobs willed the people around him to do great things, to reach beyond their potential and accomplish the impossible. Johnson's experience at Apple -- made entirely possibly by Steve Jobs -- has turned him into George W. Bush. The late great former governor of Texas, Ann Richards, once said of Bush: He was born on third base and thought he hit a triple.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
RSH $0.31 12.76%
JCP $8.24 0.00%
LMCA $37.80 0.00%
SIRI $3.96 0.00%
WEN $10.26 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs