I've been a net buyer of stocks lately, but not this week. I unloaded a few of my holdings on Tuesday and Wednesday, including one market laggard that I've owned for nearly a decade. I made just one new stock purchase this week, initiating a position in Livongo Health (LVGO +0.00%) on Tuesday.
Livongo Health is tackling health and wellness in a differentiated way, leaning on its growing collection of data and artificial intelligence to arrive at better outcomes. It started out tackling diabetes, with data scientists translating health data into personalized actionable health signals. The end result is a win-win, with the average member seeing a dramatic improvement in blood sugar levels and employers saving on healthcare costs.
Livongo Health has gone on to add weight management, hypertension, and behavioral health to its growing portfolio. Earlier this month it reported preliminary financial results that it will make official in early May. It sees $65.5 million to $66.5 million in revenue for the first three months of this year, well ahead of the $60 million to $62 million it initially offered as guidance, and more than double the $32.1 million it delivered a year earlier.
Now let's talk about the stocks I cut loose. I sold my shares in Lyft (LYFT +0.81%), Delta (DAL +7.00%), and Ford (F +4.36%) this week. Let's go over why I let them go.
Image source: Lyft.
Lyft
The country's second-largest ride sharing company is up on blocks these days. The same company that saw its revenue skyrocket 68% higher last year is now struggling with shelter-in-place orders that are gnawing away at demand. Lyft has withdrawn its earlier guidance like so many companies have these days, but a third-party source claims that gross bookings appear to be down a whopping 75%.
Unlike global market leader Uber UBER +0.75%, Lyft hasn't gone the Uber Eats route by offering takeout delivery, which is a thriving part of the top dog's business. Lyft is testing out the delivery of essentials, but it may be too little, too late on that front.
Delta
I don't know what I was thinking when I figured that airlines getting pounded when the sell-off began in late February was a buying opportunity. I gravitated to Delta as a class act among the legacy carriers, likely to withstand the inevitable shakeout and thrive in a less competitive market on the other end of this COVID-19 crisis.
I was early, and I was wrong. Delta's burning through $100 million a day, and even if it can shave that rate in half by the end of June it will come at the expense of cutting its capacity by a brutal 85% to play along with the new normal. Delta has raised a lot of money to get through the next few months, but it's hard to fathom when leisure and business demand will get back to where it used to be even once the runway is cleared for takeoff.
Ford
I bought my Ford shares a little more than nine years ago, and I'm a satisfied owner of a Ford Flex. The car wasn't a mistake, but owning the auto manufacturer itself has been outside of the steady trickle of quarterly dividends that are now off the table.
Folks aren't buying cars the way they used to, and that was before this year's pandemic and looming recession. If you think Delta is bad burning through $100 million in cash a day, Ford is likely tossing even more into the bonfire right now without the same kind of industry restrictions. I won't have a problem going Ford again when it's time to trade in my car, but the stock itself was a real lemon.
