The Fed announced its third consecutive 75-bps interest rate hike last week, which has caused the benchmark indices to plunge. The S&P 500 has lost 5.2% over the past week and 23.3% year-to-date. Moreover, Goldman Sachs slashed its 2022 year-end S&P 500 target to 3600, down 16.3% from 4300.
According to Chris Zaccarelli, Chief Investment Officer, Independent Advisor Alliance, Charlotte, NC, “The Fed is going to raise rates until inflation comes back down, and they will cause a recession in the process.”
Also, Steve Hanke, a professor of applied economics at Johns Hopkins University, said, “The probability of recession, I think it’s much higher than 50% — I think it’s about 80%.”
Given the uncertain economic outlook, fundamentally weak stocks Uber Technologies, Inc. (UBER), Workhorse Group Inc. (WKHS), and AppHarvest, Inc. (APPH) might be best avoided for your retirement portfolio. These stocks do not pay dividends, which is the key requirement for a stock to be added to a retirement portfolio.
Uber Technologies, Inc. (UBER)
UBER develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. The company operates through three segments: Mobility; Delivery; and Freight.
On September 25, 2022, Pomerantz LLP announced the filing of a class action lawsuit against UBER and some of its officers, alleging violations of federal securities laws. The suit is on behalf of a class of all persons and entities except Defendants that purchased or acquired UBER common stock between May 31, 2019, and July 8, 2022.
UBER’s revenue came in at $8.07 billion for the second quarter that ended June 30, 2022, up 105.5% year-over-year. However, its net loss came in at $2.60 billion compared to an income of $1.14 billion in the year-ago period. Moreover, its loss per share came in at $1.33, compared to an EPS of $0.58 in the prior-year period.
UBER’s EPS is expected to decline 367% year-over-year to negative $4.67 in 2022. Its EPS is estimated to remain negative in 2023. It missed EPS estimates in three of the four trailing quarters. Over the past year, the stock has lost 42.3% to close the last trading session at $26.89. Continue reading "3 Stocks to Leave Out of Your Retirement Portfolio"