3 Stocks Near 52-Week Highs Worth Selling

Since we've hit the end of the year and the stock market continues to tick upward, I thought it'd be worthwhile to glance over the new 52-week highs and lows. One thing apparent is just how staggeringly biased things are to the buy-side.

Some companies completely deserve to be trading at new highs. Southern Copper (Nasdaq: SCCO  ) is riding its underlying metal, copper, to new multiyear highs that should translate into heftier profits for its bottom line.

Other companies, however, have me scratching my head. Here are three stocks near 52-week highs that could be worth dumping.

Empty promises
Imagine I have my hand level with my waist -- that's about how tall I was the very first time JDS Uniphase (Nasdaq: JDSU  ) said they would be consistently profitable. OK, so that's a blatant exaggeration, but for a decade the company has been unable to deliver on its promises.

As fellow Fool Seth Jayson points out, JDS Uniphase has seen a dramatic rise in its accounts receivable. which could be a potential red flag for the future.

It has reported four straight years of net losses on revenue that seems equally as erratic. Recently, the trend has been to sell JDS when things look to be turning around, and that might be the correct response again.

Subscription premium
In a true play on words, it appears Sirius XM (Nasdaq: SIRI  ) is trading at a subscription premium.

Sirius XM is facing growing competition from streaming radio competitor Pandora and is still not out of the woods from having a behemoth like Google potentially partner up with a smaller project like Pandora.

Sirius XM isn't exactly "cheap," either, trading at 24 times book value and 54 times 2011 earnings estimates. The jury is also still out on how Sirius plans to pay down the $3 billion in long-term debt it currently has on its balance sheet. This gives me all the more reason to pass up Sirius XM at these levels.

Get out of the zone
AutoZone
(NYSE: AZO  ) has had a practically uninterrupted one-year run, benefiting from a boom in car parts demand in the U.S., as shown by the turnaround in Ford and General Motors.

The concern here is that as consumers opt to purchase newer vehicles from Ford and GM that have longer-lasting parts, the demand for replacement parts from AutoZone should see a decline.

It also can't be overlooked that with nearly $2.9 billion in debt, AutoZone leaves shareholders with a considerably negative book value. It wouldn't take much of a downturn in the parts sector to put a crimp in AutoZone's cash flow. Perhaps it's time to drive away from this one.

Have an opinion on any of the above companies? Let's hear about it in the comment section below!

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We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Sean Williams does not own shares in any companies mentioned in this article. He has been known to treat Best Buy stores like his own personal playground. You can follow him on CAPS under the screen name TMFUltraLong. Google is a Motley Fool Rule Breakers selection. Google and General Motors are Motley Fool Inside Value picks. The Fool owns shares of Google. Ford Motor is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


Read/Post Comments (28) | Recommend This Article (25)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 31, 2010, at 12:32 PM, 67vair wrote:

    Another FOOLISH article stating that Pandora is a threat to Sirius radio. What a joke. Pandora is no threat to Sirius. Also Pandora is NOT free and is only music. No content other than that. A useless product.

  • Report this Comment On December 31, 2010, at 12:58 PM, RRobertsmith wrote:

    oh great and powerful ultra long ! stand aside on this one! Just Don't Short Us JDSU

  • Report this Comment On December 31, 2010, at 1:10 PM, draland wrote:

    Ditto, Net Neutrality Neutered Pandora; and in what appears to be a tragic twist, seemingly neutered the author of this article as well; who appears to lack the testicular fortitude of his fellow fool , Rick, in reporting the " righteous truth " about Sirius in the face of the withering financial-media assult on this equity.....Whew!! Talk about ' cult following '!!

    Jajajaja-all the way2the Bank !!

    BM would be Proud.....; ))

  • Report this Comment On December 31, 2010, at 1:11 PM, Austin77478 wrote:

    Sean, you and your collaborators (shorts) have been on the wrong side of Sirius for a long time. In the process, your followers have lost out of its rise in value. Nice try in trying to scare shaking investors! Some may buy your tactics, and definitely not the majority of investors. You've been singing Pandora's song for a long time, and it has become a platitude.

  • Report this Comment On December 31, 2010, at 1:30 PM, pete163 wrote:

    If you want to pass as a fool would, then go ahead and find something that has the power to take off as Sirius XM dose and let me know what it is!! Sirius XM has the SHORTS by the neck and they know it. Keep buying Sirius XM even if you can only buy 5,50,100 shares, just buy it. This stock is going to kick some but.

  • Report this Comment On December 31, 2010, at 1:33 PM, milanmadman wrote:

    you must randomly pick stocks to bash, and you are 2 weeks behind the fcc announcement neutering Pandora. Plus your Autozone call stinks,too. More people are fixing their old cars, than are buying new ones, still!

  • Report this Comment On December 31, 2010, at 1:37 PM, dan9812 wrote:

    idiot

  • Report this Comment On December 31, 2010, at 2:08 PM, doubting wrote:

    Wow Sean,

    You are so smart! I am jumping out of my chair in the rush of getting rid of this miserable stock and horrendous company called Sirius XM. Thank you, shepherd, for your divine advice. Your humble stupid sheep need it, or… maybe you should still keep it to yourself. Are you serious that people in their sober mind will follow your so called advice how to rob themselves?

    Your suppositions and numbers are so farfetched. You have the guts to compare the company with $2.8B revenue, over $600M EBIDTA and over $500M on the books at the end of 2010 with a company existing on hype with maybe $100M revenue and no profit no matter that they claim over 60M customers. How many subscribers do they need to have to start making money? 120M or more? Pandora is not a survivable business because they do not have a feasible business model. Neither debt is an issue for siri anymore because of brilliant refinancing steps made in 2010 and fast growth. First significant chunk of debt payment (under $1.3B is coming up at the end of 2013) preceded by two full years of marginal capital expense in small millions, reduced interest payments well under $200M/year, continued savings due to merger synergies and favorable new contract negotiations coupled with exponential growth due to:

    a. higher cars sales;

    b. further after market penetration;

    c. Sirius XM 2.0 and

    d. further brand recognition.

    Arguably, we can forecast the following conservative parameters for 2011:

    1. Subs - 22M

    2. Revenue - $3.3B

    3. EBIDTA - $0.95B

    4. FCF - $450M

    2012. (after a long overdue $2 price increase in August 2011 and minimal capital expense for another five years)

    1. Subs - 24M

    2. Revenue - $4.0B

    3. EBIDTA - $1.7B

    4. FCF - $1.2B

    2013

    1. Subs - 27M (higher auto numbers; stronger after market penetration and Sirius XM 2.0/3.0/4.0 impact)

    2. Revenue - $4.6B

    3. EBIDTA - $2.2B

    4. FCF - $1.6B

    I just wonder what kind of issues you will be inventing then for you brainless herd. Sirius XM is going to be the most profitable company in media and one of the most profitable revenue wise in industry in general, with profits as high as 50% or more of their revenue starting 2014. People holding siri long enough stand to make from 10 to 100 times returns depending on when they got in. Save these numbers and let us talk the next three years if you have the guts.

  • Report this Comment On December 31, 2010, at 2:24 PM, cdaveat wrote:

    Hahaha! It's New Years Eve not April Fools! Pandora isn't a "Sirius" threat to anything. Non programmable radio is a great novelty but wears out very quickly especially when you're forced to listen to someone else's selections. Sean you're losing credibility every time you post about Pandora v Sirius. So far I don't know anyone who wants Pandora for anything other than a desktop radio station. Also maybe you haven't been paying attention to the news but Pandora is facing a pretty big problem with music pricing. Keep on reaching for that Pandora rainbow!

  • Report this Comment On December 31, 2010, at 2:27 PM, sirinsocal wrote:

    Surely you can come up with some better reasons to trash Sirius than the worn out Pandora & Debt Sean. I pay $80 a month for sat tv because of the content they can provide to me. When Pandora can give me access to NFL, MLB, NHL, PGA, ESPN, MSNBC, BBC, NPR, CNN, Howard, Oprah, Martha, commercial free music & do it uninterrupted anywhere in the US then they will be a competitor.

    As for debt, would Moodys and S&P both have upgraded their Sirius CFR twice this year if they felt Sirius had an unmanageable debt level?

  • Report this Comment On December 31, 2010, at 2:39 PM, artstudio1 wrote:

    The only thing I'm getting rid of are the poor writers who are trying to manipulate stock prices of Sirius XM Radio. Your article is a joke and it's time to set my filter on my Google finance browser to not show any stories from Motley Fool, especially Sean Williams stories. You've done nothing but bash Siri and the stock price still continues to rise. Looks like your credibility is what continues to sink. So long and good riddance Sean Williams!

  • Report this Comment On December 31, 2010, at 2:47 PM, mlrinc10 wrote:

    Sean? Are you and Alyce the same person?

    or maybe you're all SiriDoom!

  • Report this Comment On December 31, 2010, at 2:48 PM, langco1 wrote:

    sirius a top pick to file bankruptcy in 2011....

  • Report this Comment On December 31, 2010, at 3:06 PM, Austin77478 wrote:

    artstudio1, do not filter, because you may not have an opportunity to rebut MF's diatribes about Sirius.

  • Report this Comment On December 31, 2010, at 3:07 PM, multi007 wrote:

    @langco1 - you wisdom is lacking...

  • Report this Comment On December 31, 2010, at 3:09 PM, Qsela34 wrote:

    What a difference 2 years makes!

    Before, an "article" like this would have had all the bashers/shorts commenting in droves on so called predictions, numbers, valuations, bankruptcy, etc..etc..etc..

    NOT ANY MORE

    Two years later, the business model is still the same. The company is stronger than ever, GROWING quarter over quarter, negotiating better deals, expanding, upgrading, MERGING into one major tech MONOPOLY!...and still nonsense like this is written by an "investment education" site! hahahahahaha

    but where are the negative comments to go with it??? *crickets* the silence from the bashers is deafening

    Sirius/Xm investors are a weathered, strong, united, unified, smart bunch of people

    The only difference now is that the bashers are extinct and the monstrous media MANIPULATION of this company is coming to an end. Slowly but surely these so called investment sites and "writers", like this guy Sean Williams will turn tail and report the truth that SIRIUS/Xm is a market success story that is only starting to shine.

    What a difference two years makes! Happy New Year

  • Report this Comment On December 31, 2010, at 3:27 PM, andyjpm wrote:

    I just keep making money by doing the exact opposite of what these articles by the fool say! Can't wait to buy as much SIRI as I can. Everyone I know who has bought this stock in the past two years got incredible returns and they seem to get more every week! The writer of this article can't be serious, if he is, he must have an agenda! I am sure he would have also said to sell MSFT back in 1986! The fool is the only place that seems to ever write negative things about SIRI, and the stock just keeps going up. Maybe there is more to the name "Fool" than we know!

  • Report this Comment On December 31, 2010, at 3:58 PM, ItAintCool wrote:

    Sean, do you and Alice Lomax share a bed a night dreaming that Pandora is the great "SAT Radio Killer"?

    We laugh at you. It's not just because many of us are SIRI shareholders, it's because your ideas are not based on any sense of reality. Pandora is not a viable business model. The number of paid subscribers it has is a micro-fraction of it's "alleged" total subscribers (which we now know includes dead and inactive accounts). It has no viable revenue stream. The lack of Net Neutrality for cell carriers will cripple it and any other streaming app that hogs bandwidth. Even the FCC's defiance to enforce net neutrality on non-wireless ISP's will be shut down by congress.

    Can you give us any support to your statement about Pandora other than hyperbole and wishful thinking? The reality is SIRI has over 20 million "paid" subscribers. It is growing. it is generating free cash flow and it is making a profit (albeit a small one at this point). It has paid down its debt and even the creditors are giving the company high marks to its ability to pay down its debt.

    Happy New Year. I hope you continue to get squeezed out with the shorting on SIRI.

  • Report this Comment On December 31, 2010, at 4:30 PM, southernbeachguy wrote:

    Sean & Alyce are both idiots...... Fool you lose creditability every time they write an article for you. Lost Creditability = lost Clients.

  • Report this Comment On December 31, 2010, at 4:32 PM, southernbeachguy wrote:

    Pandora is for 12 year olds that don't have money to buy a Car with a real radio. Adults use Sirus/XM.

  • Report this Comment On December 31, 2010, at 7:11 PM, ItAintCool wrote:

    langco1 wrote:

    sirius a top pick to file bankruptcy in 2011..

    langco1 is a top pick to plead insanity in 2011. These posts are just his way to set up proof of mental defect for his inevitable murder trial.

    Happy New Year!

    And to all the SIRI shareholders out there a very prosperous 2011 to you all!

  • Report this Comment On January 02, 2011, at 11:18 AM, FM5 wrote:

    langco1, what are you going to say when siri makes a deal with tata motors & all of china

    has sat raidos, & make a deal with all major air lines for live TV in all the jets , buses & trains

  • Report this Comment On January 02, 2011, at 12:20 PM, crca99 wrote:

    Well, anyway, thanks for the JDSU info.

  • Report this Comment On January 03, 2011, at 10:45 AM, HectorLemans wrote:

    Dear Motley Fool,

    Some time in the near future, can we have an article about rabid stock fans who clog up message boards with their incessant ramblings?

    Thanks,

    Hector

  • Report this Comment On January 03, 2011, at 1:49 PM, snowpol wrote:

    What a Donkey!! You've been bashing and telling us to sell for the last 52 weeks and look where the stock has gone. And why should anyone listen to you? So you don't loose on your SHORTS? Cut your losses and take your own advice!

  • Report this Comment On January 03, 2011, at 2:57 PM, ItAintCool wrote:

    HectorLemans wrote:

    Dear Motley Fool,

    Some time in the near future, can we have an article about rabid stock fans who clog up message boards with their incessant ramblings?

    People rambling about a 34-bagger stock? People rambling about making anywhere between 20% to 3400% return on an investment depend on when you bought it in the last 2 years? Hey that's the kind of group I want to be in!

    What you call "rambling" by rabid stock fans, many of us call pointing out the truth, in the face of stupidity. Fools Sean Williams and Alyce Lomax love to cite Pandora as the Great SIRI-XM Killer, but they say it without any factual support. In truth the facts show that Pandora is not a viable business model. Lack of Net Neutrality and limited programming to music only (not to mention a few black eyes for releasing customer info to 3rd parties) show that it has no ability to compete and/or survive against the Sat Radio virtual monopoly.

    The other problem is that this author and Ms. Lomax have been telling people to sell SIRI for the last 2 years, and yet the stock continues to go up and up. And rather than admit this stock is not the lightweight they thought it was and say they "missed the boat", they continue to incessantly say "Don't buy" or "Dump" the stock. Denying people the chance to make serious $. BTW: The stock rose another 4% today again. This isn't magical vaporware that being pumped and dumped, this is a real product with over 20 million PAID subscribers and more joining every day.

    New highs will reached throughout 2011 and beyond. So go ahead and listen to these fools and lose out.

  • Report this Comment On January 05, 2011, at 1:26 PM, firemachine69 wrote:

    Was it not Sirius/XM that wanted to convert ten shares to one?

    My my, do people have a short memory.

    When the economic bubble bursts, and it will, expect such frills like expensive satellite radio to go right down the tubes.

  • Report this Comment On January 07, 2011, at 1:50 PM, tomd728 wrote:

    Yo Fire..........

    That reverse split on SIRI will still not get the fleas

    off this dog.

    Good post mate.

    Tom

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