Wall Street's been pretty wild, and that's the kind of bucking bronco that makes this weekly diss piece all the more interesting. My three stocks to avoid last week were on the move -- as Royal Caribbean, Spotify, and Despegar.com were up 1%, 1%, and 6%, respectively -- averaging out to a 2.7% gain.
The S&P 500 rose 1.5% for the week, so I lost last week even though two of the three picks did underperform the market. The S&P 500 has still outperformed my bearish picks in 14 of the past 16 weeks, so I'm feeling pretty good about that. This week, I see ExxonMobil (XOM 0.51%), Blue Apron (APRN +0.00%), and Simon Property Group (SPG 1.07%) as stocks that you may want to consider steering clear from. Let's go over my reasons for the near-term pessimism.
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ExxonMobil
We may be reaching Peak Oil, even if the party is still flowing like a gusher. The hottest stocks this young year are energy companies, dominating the list of stocks that are up by 20% or better in 2022. The most valuable company by market cap in that camp is ExxonMobile, up 33% year to date.
Oil and natural gas prices have been inching higher, and it's not a surprise to see ExxonMobil more than double since the start of last year. It helped its case last week with a blowout quarterly report. ExxonMobil posted better-than-expected results on both end of the income statement. It also issued encouraging guidance along with a prudent approach to keeping capital expenditures below pre-pandemic levels. But let's take a longer-term look. Analysts still see revenue declining in 2023, with earnings taking an even bigger hit. Between inflationary pressures likely to ease in the near future and the long-term prospects for gasoline as a fuel source diminishing, it's easy to see how investors may start taking profits from the leader of this year's hottest sector.
Blue Apron
We're heading into the thick of earnings season, and Blue Apron is a name that could be particularly problematic this week. The pioneer of gourmet meal kits has seen growth slow since the initial pandemic boom, and investors are bracing for a dud this time around.
Blue Apron reports its fourth-quarter results on Thursday morning. Analysts see a 5% decline in revenue from where it was a year earlier. It's expected to post another large deficit for the quarter, and three months ago it posted a much heartier loss than what the Wall Street pros were targeting.
Top-line growth is expected to resume in 2022, but analyst deficit forecasts have widened for the year ahead in recent months. With meal-kit providers resorting to heavy promotions to woo new or return customers, it's going to be hard for any player to thrive profitably anytime soon.
Simon Property Group
Investors have been flocking back to shopping malls, and that comes with a renewed interest in retail REITs. Simon Property Group is a leading mall operator, owning some of the country's busiest shopping complexes. Like Blue Apron, it's reporting fresh financial results this week. Simon Property Group is stepping up with quarterly results shortly after Monday's close.
Simon Property Group has had strong quarterly reports leading into this week's moment of truth, and -- unlike Blue Apron -- analysts have been nudging their estimates higher lately. My concern here is that this holiday quarter had a bit of a rocky finish. The omicron variant probably kept more holiday shoppers online. We also saw U.S. retail sales decline 1.9% in December, well above the flattish results that economists were modeling. With interest rates likely to rise in 2022, it will take more than decent yields to keep REITs going strong this year. Simon Property Group still needs to prove that bricks-and-mortar shopping experiences will not fade in relevance over time.
If you're looking for safe stocks, you aren't likely to find them in ExxonMobil, Blue Apron, and Simon Property Group this week.
