Wall Street's rally late last week wasn't enough to get it out of the red. I thought my "three stocks to avoid" -- MicroStrategy, Cinemark Holdings, and Ford -- were going to lose to the market in the past week. They slipped 1%, fell 4%, and rose 1%, respectively. The final result was an average dip of 1.3% for the week.
The S&P 500 inched 0.8% lower. I was right. I've been correct in 52 of the past 81 weeks, or 64% of the time.
Let's turn our attention to the week ahead. I see Yeti (YETI 0.58%), Robinhood Markets (HOOD +0.15%), and Electronic Arts (EA 0.07%) as stocks you might want to consider steering clear of this week. Let's go over my near-term concerns with all three investments.
NYSE: YETI
Key Data Points
1. Yeti
There was a time when it seemed as if Yeti's appeal would be timeless. Folks had no problem paying a premium for Yeti drinkware and coolers. Times have changed. We're no longer eager to spend $35 on a 20-ounce tumbler or $250 for a hard cooler.
Yeti reports first-quarter results on Thursday morning. It's not likely to be as hot as warm coffee in an insulated Yeti tumbler. Analysts see flat revenue growth with profitability cut in half. A bull will argue that this is the kind of pessimism that makes the stock a buy ahead of a telltale earnings report, but Yeti has fallen short of Wall Street profit targets in two of the past three quarters.
Image source: Getty Images.
I was burned badly the last time I singled out Yeti in this column, six months ago. It was also heading into a quarterly report, but the third quarter was the one time it did beat expectations. The shares soared 39% that week.
I'm going with Yeti again anyway. Analyst estimates have been drifting lower in recent weeks. There were also some voluntary recalls in February, and if that hurt the brand it may show up in Thursday's report.
NASDAQ: HOOD
Key Data Points
2. Robinhood Markets
Another potentially problematic earnings report that will happen this week is Robinhood Markets. The next-gen exchange for options, crypto, and stock traders -- in that order -- has had its share of controversies and investor backlash. It reports quarterly results on Wednesday afternoon.
The good news is that crypto prices soared through the first three months of this year. Growth stock investing also began showing signs of life. We know that Robinhood had 12 million active users and $74.7 billion in assets under custody at the end of February, up nicely from the the 11.4 million active accounts and $62 billion in account assets it had when the quarter began two months earlier.
We're still far from Robinhood's peak popularity two years ago when it had more than 21 million active users. A lot of investors have turned on the platform that's been slow to roll out desired features. Regulators always seem to have a bone to pick with the once-trailblazing exchange. Analysts see a robust 42% year-over-year surge in revenue, but that is expected to come with a widening deficit. CEO Vladimir Tenev also sold more than $800,000 worth of stock last month. Robinhood has a lot to prove with its stock stuck in the single digits.
NASDAQ: EA
Key Data Points
3. Electronic Arts
Electronic Arts is also jumping into the earnings season party this week, and it's also expected to be a ho-hum affair. The video game developer and publisher steps up on Tuesday afternoon. Wall Street's bracing for flat top-line growth and a 10% year-over-year decline in earnings per share.
This is a challenging time for the industry. EA's biggest rival is struggling to get regulatory agencies -- both here and abroad -- to sign off on its proposed combination with a tech giant. It's a situation that caps the upside for EA shareholders in terms of a potential buyout premium. A tightening economy will also eventually pinch the money that gamers can pay on their diversions.
The stock market is always on the move. If you're looking for safe stocks, you aren't likely to find them in Yeti, Robinhood, and EA this week.
