Wall Street took a step back this week. The "three stocks to avoid" in my column that I thought were going to lose to the market last week -- Lennar, Baozun, and Scholastic -- rose 4%, tumbled 11%, and was unchanged, respectively, averaging out to a 2.3% decline.
The S&P 500 fell again this week, moving 1.8%% move lower. I was barely right. I have been correct in 39 of the past 61 weeks, or 64% of the time.
Let's turn our attention to the week ahead. I see BlackBerry (BB 1.80%), Steelcase (SCS 1.26%), 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. BlackBerry
We're far removed from BlackBerry's glory days as the maker of leading-edge mobile phones. Revenue has declined in 10 of the past 11 years, and it's on pace for a third straight top-line slide now. BlackBerry will offer up financial results for its fiscal third quarter on Tuesday afternoon. One way or another, the stock will be on the move.
If you haven't seen a BlackBerry in the wild, you're not alone. The company has transitioned away from its iconic handheld communication devices, making the most of its strong software roots and intellectual properties to rebuild itself. BlackBerry is now a provider of products and services offering intelligent cybersecurity solutions.
BlackBerry had a big run as a meme stock early last year. But that performance didn't last. BlackBerry has yet to deliver on the hype, and revenue is still going the wrong way. Analysts don't see a return to profitability for another two years, and a lot can happen on the way there. This potential turnaround still isn't turning around.
2. Steelcase
There aren't a lot of companies reporting fresh financials this week with Christmas closing in, but Steelcase is one them. The leading maker of office furniture as well as work-from-home essentials checks in with its fiscal third-quarter results after Monday's market close. It will host its earnings call the morning after.
Steelcase has seen its business pick up after seeing revenue plummet 30% in the pandemic-saddled fiscal 2021. Expectations are high heading into this week's financial update. Analysts see the top line rising 13% for the fiscal third quarter, with profits more than doubling. The bearish thesis here is that businesses have to be scaling back their office furniture orders ahead of a widely expected economic slowdown. We've seen many high-profile companies announce layoffs, and the pain should be even more intense at smaller enterprises.
Steelcase may meet expectations, though. It has topped bottom-line forecasts in back-to-back reports. However, guidance could be sobering. We saw this happen three months ago, when Steelcase shares tumbled despite an earnings beat on a weak near-term outlook. There's no reason to think that things have gotten better since then for Steelcase.
3. Blink Charging
There's no denying that electric vehicles are the future, and that finds investors chasing the few publicly traded plays that are working to keep next-gen cars charged and rolling. Blink Charging offers charging equipment and charging service for electric vehicles. It also makes the cut here this week because it's too early to single out winners.
Analysts don't see Blink Charging turning a profit for at least five years, and by then the market will probably consist of several new players. Sure, Blink Charging will be introducing new products at next month's CES 2023, but this is a fast-moving industry where being early isn't enough.
Despite the lack of earnings, Blink Charging trades at a rich 14 times trailing revenue. Blink Charging may be able to charge your electric ride, but it has the wrong look -- overvalued and profits nowhere in sight -- to charge up market sentiment.
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 BlackBerry, Steelcase, and Blink Charging this week.
