You have probably received advice on which stocks to buy sometime during your investment journey. However have you received information on which stocks to avoid?
RPC
Rpc had a share price of 9,20$ as recently as January the 23 of this year and the market cap on the same date was 1,993$ billion.
During the previous year 2022 the stock was highly successful and was up 90% in value compared to 2021. As one of the best performing stocks of 2022. The highly respected magazine called Barrons has placed RPC on their list of stocks who are going to tank. Analysts still recommend investors to keep their shares and to not purchase anymore.
As I always recommend, you should always form your own opinion and not really blindly follow the opinions of analysts, and magazines. The main reason for this is the mere fact that analysts and magazines often follow their own agenda. Most commonly they want investors to sell a stock so the price tanks and they can purchase a major stake in the company or make money by shorting it. Therefore you should use these facts and make your own decision regarding RPC.
Gamestop
During 2021 Gamestop was labelled as a losing company by analysts, hedge funds as well as financial newspapers and channels. Gamestop is a dying company no doubt, because they simply are not able to compete with the likes of Amazon who seem to swallow up every tech giant who aren’t massive.
Hedge Funds started shorting the stock and dumping it at the same time. They were making a huge amount of money and unfortunately they started to upset the little guy and that was a monumental mistake costing them dearly. Now they wanted to stick it to the hedge fund and they really did.
They began rallying investors on social media to purchase as many shares of Gamestop as they could afford. A major factor in how much the price of a stock is going to be is supply and demand. The stock was being dumped and shorted by many making the supply high. Now the demand was huge as well so naturally the stock price skyrocketed. The good news is that the hedge funds lost loads of money and got a bloody nose from this rally. Unfortunately people took their own lives, because they were in so much debt from shorting the stock. On the other hand loads of people made huge amounts of money.
Now that this period of success is over according to many, because the price for one share was 15.46$ dollars on the sixth of January this year and the market cap was 5.013$ billion.
The main reason to avoid purchasing shares in Gamestop is its volatility. Volatile stocks in my experience never go on a steady run and therefore investors who own shares in these stocks only do it, because of the potential excitement of massive potential gains.
Biogen
Biogen is an american biotechnology company who have their offices in cambridge and they discover, and develop therapies which are aimed to treat neurological diseases.
Recently they have been grabbing headlines, because they have potentially come up with a new Alzheimer’s drug that can be revolutionary. Drugs similar to the one they have come up with usually don’t have this high potential of success. The company has tried and failed on several occasions to develop drugs that slow down Alzheimer’s.
Even if the FDA= Food and Drug Administration has approved the drug for their drug called Aduhelm, it has not lived up to the high expectations that were placed upon it. The coverage of the drug was restricted by the CMS= The U.S. Centres for Medicare and Medicaid Services. Additionally it has not been sold a significant amount of times Biogen expected it would.
That the medicine succeeds is crucial for the company, because the valuation of the company has gone down due to the fierce competition they are having to deal with. The revenue generated in 2021 was 2.5$ Billion decreased by 10% during the year 2022.
Of course the share price received a massive lift when the news broke about their new drug called lecanemab. Unfortunately for Biogen the exact opposite can occur if problems were to arise. The main reason to avoid purchasing shares in biogen is the Rampant price fluctuations the share price has gone through over the last four years.
Conclusion
This article has talked about the three stocks that many believe that investors should steer clear off. These stocks are RPC, Gamestop and Biogen. It was difficult to pick the stocks that I would write about during this article and the main reason why I chose these three is, because of the detailed facts available to me from both the internet, and two different articles.
Hopefully you now know which stocks you should avoid letting reside in your portfolio. If you have any questions or suggestions for my next article feel free to reach out to me.
