2 Stocks to Sell in a Dismal Market

With losses extending across the market, the time to sell one or more underperforming stocks in lieu of discounted well-performing picks could be now.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Volatility remains king in the current market. After most stocks hit 52-week highs in February, March brought with it a score of 52-week lows. That same extreme volatility last week shot the market back up well over 1%. Throughout this volatile market, there has been plenty of talk about great buying opportunities but not much around selling stocks.

Here are several underperforming stocks to consider selling in lieu of one or more discounted top picks.

The power is on, but nobody is buying … Sell!

Cameco (TSX:CCO)(NYSE:CCJ) is a one-time titan that has ended up in the discount bin in recent years. As one of the largest uranium miners on the planet, Cameco benefits from the growing adoption of nuclear power. Utilities looking for a clean and quick way to generate power for their growing infrastructure needs have turned to nuclear power. So, why would investors want to sell?

The only problem with that is the cost of uranium has had a dismal decade. Following the Fukushima disaster in 2011, the demand for nuclear power has all but evaporated. This has resulted in the price of uranium dropping to the low US$20s per pound from a near US$60 per pound back in 2011. That drop represents a solid argument for investors that want to sell.

Demand for nuclear power has grown in recent years, fueled by strong demand in countries with growing infrastructure needs. By way of example, China, India, and Russia constitute nearly half of the new reactors under construction worldwide. Unfortunately, despite that renewed growth, the price of uranium remains low.

Cameco has even turned to cease production at some facilities, slashing costs and as well as its dividend to rein in costs. Year to date, Cameco is down over 11%, which may seem like a win considering the state of the rest of the market, but over the trailing 12-month period those losses extend to over 30%. In other words, now might be a great time to sell and pick up another discounted stock that has growth potential.

Staying healthy is paramount in this new reality

The global coronavirus pandemic has dramatically changed our daily lives. The pharmaceutical sector in particular is facing immense challenges to work with governments and agencies on providing medicine to patients and working on a potential vaccine to COVID-19. Bausch Health Companies (TSX:BHC)(NYSE:BHC) is doing its part as well. The company recently announced it was ramping up production of chloroquine and azithromycin in some markets, while providing supplies and assistance in others. So, why would investors want to sell?

Unfortunately, those efforts don’t exactly make Bausch a screaming buy. The company has been clawing out from billions of debt stemming back to its near collapse in 2016. When well over 90% of the company’s value was wiped out, many investors were stuck holding pennies on the dollar, waiting for better times.

That time to sell might be now. To be clear, what Bausch has done in the past few years to turn around was nothing short of incredible. Investors will find better gains (and possibly dividends) by opting to invest in any number of discounted greats.

So far in 2020, Bausch has dropped over 45%, while over a longer two-year period, the company is near flat.

Should you invest $1,000 in Bausch Health Companies right now?

Before you buy stock in Bausch Health Companies, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Bausch Health Companies wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,058.57!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 38 percentage points since 2013*.

See the Top Stocks * Returns as of 2/20/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any of the stocks mentioned. Tom Gardner owns shares of Bausch Health Companies. The Motley Fool owns shares of and recommends Bausch Health Companies.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Investing

Close up of an egg in a nest of twigs on grass with RRSP written on it symbolizing a RRSP contribution.
Tech Stocks

2 Stocks I Think RRSP Investors Can Hold Forever

Here's why RRSP owners can consider holding TSX stocks such as Shopify in the registered account right now.

Read more »

Canadian dollars are printed
Dividend Stocks

Is Passive Income From Stocks Legit? Here’s How Much You Can Really Make

You can get about 5% per year in passive income, maybe more with high-yield stocks like Enbridge Inc (TSX:ENB).

Read more »

Canada national flag waving in wind on clear day
Investing

1 Mega Trend Shaping Canadian Investments for 2025

Tariffs are likely to dominate the economic landscape for the time being.

Read more »

dividends grow over time
Dividend Stocks

2 Canadian Value Stocks for 2025

These two value stocks are prime opportunities for investors looking for strength as well as dividends.

Read more »

chart reflected in eyeglass lenses
Dividend Stocks

TFSA $7K: Where to Invest Right Now

TFSA users can invest their $7K annual limits in two profitable large-cap dividend stocks right now.

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Investing

The Best Canadian Stocks to Buy and Hold Forever in a TFSA

For investors looking to add to their TFSA, here are two top Canadian growth stocks that may be worth buying…

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Investing

2 Brilliant Canadian Stocks to Buy Now and Hold for the Long Term

A small-cap and a large-cap Canadian tech stock can both be terrific holdings to consider for your self-directed investment portfolio,…

Read more »

calculate and analyze stock
Investing

Top Canadian Stocks to Buy Right Now With $7,000

Given their solid underlying businesses, consistent performances, and healthy growth prospects, the following three Canadian stocks are ideal additions to…

Read more »