November got off to a rough start last week. The market sputtered, but the same can't be said for the equities that I figured would be in for a week of hurt. The "three stocks to avoid" in my column last week that I thought were going to lose to the market -- Cinemark Holdings (CNK 0.97%), CVS Health (CVS -0.22%), and Noodles & Co. (NDLS -0.36%) -- rose 7.6%, climbed 5.7%, and sank 5.2%, respectively, averaging out to a 2.7% ascent.
The S&P 500 experienced a 3.3% move lower. I was wrong. I have still been right in 35 of the past 55 weeks, or 64% of the time.
Now let's look at the week ahead. I see Yeti Holdings (YETI 1.60%), Redfin (RDFN 8.49%), and Blink Charging (BLNK 4.76%) as stocks you might want to consider steering clear of this week. Let's go over my near-term concerns with all three investments.
Image source: Getty Images.
1. Yeti Holdings
There's no denying the brand appeal of Yeti. If you're going to pay a premium for drinkware or a cooler, it's a fair shot that it will be a Yeti. The next few quarters could still prove challenging, though. The original Yeti, the fictional Himalayan beast, was built for winter, but the same can't be said about Yeti Holdings. We're seeing the economy sputter, and suddenly paying $35 for a 20-ounce Yeti tumbler doesn't seem like such a smart idea. We'll see how the company is holding up when it reports third-quarter results on Thursday morning.
Yeti stock plummeted when it last posted fresh financials three months ago. It was a rare miss on both ends of the income statement. Analysts see top-line growth decelerating to 15% this week on negative earnings growth. Declining container costs will help with shipments, but just about everything else -- including, more importantly, consumer demand -- seems to be going the wrong way.
William Blair analysts met with Yeti's CEO and CFO in mid-September, walking away encouraged, but less than a week later the CFO surprisingly resigned to find another gig closer to his family's home. The CFO's departure went into effect at the end of October. Why didn't he wait two more weeks to be there for a critical earnings report? The timing was surely a coincidence, but it's not a good look.
The long-term potential for Yeti remains strong and the current valuation is attractive. It just has some trends working against it right now. Winter is coming, Yeti.
2. Redfin
There's been more "red" than "fin" to Redfin these days. The stock is now 96% -- yes, 96% -- below the all-time high it hit early last year. Redfin stock is understandably out of favor. The real estate market is cracking from all sides, and Redfin's business is exposed like an unfinished attic.
Redfin reports quarterly results on Wednesday afternoon, and it's going to be problematic. Real estate demand has shriveled up as mortgage rates skyrocket, and lower prices are crushing its home-flipping business. With loss projections widening, it's easy to fret about the near-term challenges Redfin is facing. Like Yeti, Redfin has strong long-term upside given its current valuation, but there are too many negative catalysts swirling about to get the stock moving higher for now.
3. Blink Charging
Another low-priced stock reporting earnings this week that's going through a rough patch is Blink Charging. Revenue growth has been strong as it builds out its networking of electric-vehicle charging stations, but the top-line results are still microscopic. We're talking about $35.6 million in trailing revenue. And as far as the stock has fallen, it's still trading for a stiff 19 times trailing revenue.
The rub is that Blink Charging is losing a lot of money. It has posted larger-than-expected deficits in back-to-back quarters. Analysts have been widening their projections for red ink. Those same Wall Street pros see Blink Charging at least five years away from profitability. It will gets its say when it announces quarterly results on Tuesday afternoon. It might not have enough juice.
It's going to be a bumpy road for some of these investments. If you're looking for safe stocks, you aren't likely to find them in Yeti Holdings, Redfin, and Blink Charging this week.
