If the stock market bottomed in October, then liquidating your portfolio in November would seem ill-advised. However, for fully-invested individuals, it may be necessary to rotate out of stocks with poor prospects in order to raise funds to buy good companies with better chances to appreciate.
Below are the seven largest manufacturing companies, by market capitalization, rated as sell by TheStreet.com Ratings' stock model. Each has an overall grade of D+ or lower. If you own any of these stocks, be aware your funds may be better invested elsewhere.
With a D rating,
( HIT) is the largest manufacturer with a sell rating from TheStreet.com Ratings. The shares have lost about one-third of their value so far this year, but with a market capitalization of $16.3 billion there is still value to protect. The company recently lowered profit forecasts. A worldwide recession may further limit corporate spending and weaken demand for Hitachi's consumer electronics.
With a market cap of $12.5 billion,
is the second largest sell-rated stock among the manufacturing group. Its stock has declined 28.7% so far in 2008. It remains to be seen how the incoming Obama administration will attempt to squeeze costs out of the health-care system and what effect, if any, this would have on the margins for Boston Scientific medical devices. For October, Boston Scientific shares saw extremely heavy corporate insider sales, with a total of 42.7 million shares sold for $351.7 million.
The third largest stock in the bunch, with a market cap of $10.5 billion, is
( MOT). These shares have sunk 71.2% year to date and are rated D+.
iPhone 3G has knocked off Motorola's Razr as the most popular handset. Meanwhile, according to the NPD Group, total U.S. consumer purchases of handsets are down 15% to 32 million units.
, a former division of the
. This stock is rated D with $7.9 billion in market cap remaining after losing just over half its value this year. CEO Thomas Lynch disclosed in last week's conference call "that 2009 will be a much tougher year" and lowered forecasts of sales and earnings citing shrinkage in sales to the stalled, European auto industry.
shares are rated D+ and are down 43.3% since December 2007 to a $7.4 billion market cap. The chips made by STMicroelectronics are components in the cars, computers and consumer products susceptible to a global slowdown.
, also rated D+, supplemented its forest products business with real estate construction and development. An end to the real estate recession may be needed to return Weyerhaeuser to profitability. Until then, Weyerhaeuser is closing facilities.
Lastly, telecom-equipment maker
has lost two-thirds of its value in the last year, but is still worth $5.9 billion. With declining sales forecast for full-year 2008, a return to profitability is not expected in the near term.
For more coverage from TheStreet.com Ratings team, check out TheStreet.com Ratings section.
Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.