I write a lot about stocks worth buying, but it's important to talk about selling. Sometimes you need to sell something to buy something else. Sometimes it's just a good spot to move on from an investment, even if you don't have immediate deployment plans.
I've been selling some stocks this month. I may regret the moves -- at least some of them -- but with all of the market uncertainty as tensions continue percolating overseas, I think it's a good time to build up my cash reserves. I will put that money to work, ideally sooner rather than later.
I closed out my positions in Alibaba (BABA 0.73%), Crocs (CROX 0.43%), and W.P. Carey (WPC +0.27%) in the first three trading days of last week. Why did I choose these three names over the nearly 40 stocks I continue to own? Let's dive in to my three latest moves to sell.
Image source: Getty Images.
1. Alibaba
China's e-commerce pioneer isn't the growth darling it once was. When Alibaba wraps up its fiscal 2026 at the end of this month, it will be the fourth consecutive year of single-digit revenue growth. The same stock that nearly doubled in 2025 is inexplicably now trading 5% lower over the past year.
The stock may seem cheap at less than 18 times trailing earnings, but the multiple is creeping higher ahead of its fiscal third-quarter results later this week. In another surprising twist, the biggest reason for the stock's declining profitability is also the top contributor to its monster ascent early last year.
Most of Alibaba's rise in 2025 happened through the first three months of last year. With trade tensions rising between China and the U.S., the world's second-largest nation encouraged its homegrown tech stars to develop artificial intelligence (AI) chips ahead of trade restrictions on U.S. providers.
NYSE: BABA
Key Data Points
Alibaba's adjusted earnings declined 71% in the fiscal second quarter it reported in November, largely due to those investments in AI and other growth and marketing initiatives. It should be more of the same with 2026's fiscal third quarter coming out on Thursday. The fourth-quarter performance is also expected to see profitability under pressure. Analysts see the bottom line starting to recover in fiscal 2027.
There is still a lot to like about Alibaba, despite the margin contraction and unimpressive revenue growth. Its two flagship businesses -- Taobao and Tmall in China -- are cash cows. They combined to deliver an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 44% in fiscal 2025. They afford Alibaba the opportunity to take financial hits with big AI investments and its growing AliExpress international business while still retaining profitability. It may face stiff competition in AI chips, even within its own country, but it can swing for the fences for a shot at a homer in that explosive market.
I remain a long-term believer in Alibaba. I'll even accept the possibility that selling ahead of this week's financial update can be a costly mistake if it's a blowout report. However, it was one of my lowest-conviction holdings in these challenging international times.
NASDAQ: CROX
Key Data Points
2. Crocs
I lightened my position in Crocs stock last summer. I sold the rest of my shares last week. I'm a fan of the brand's perseverance. How many times over the past two dozen years have those distinctive shoes been called a fad, only to see a revival in the hole-filled resin footwear?
It is slumping lately. After five years of double-digit revenue growth, its business decelerated in 2024 and turned slightly negative last year. Everyone agrees that the HeyDude acquisition was a distraction and a mistake.
The stock remains textbook cheap, and guidance is somewhat encouraging. It is modeling earnings per share between $12.88 and $13.55 for this year, pricing Crocs at just 6 times forward net income. It hurt to let go of a stock that is priced so irrationally low, and I imagine I'll be back in Crocs -- the stock and my own collection of the shoes -- before long.
NYSE: WPC
Key Data Points
3. W.P. Carey
Finally, we have a REIT on my chopping block. I've picked up several real estate investment trusts in recent years, looking for income to offset my growth investments. W.P. Carey is one of the safest REITs out there, but with sector rotation sending renewed interest W.P. Carey's way -- it's up 11% so far in 2026 -- it felt like an easy one to cut loose.
Even after raising its dividend last week, the 5.2% forward yield isn't that impressive. You're not going to go much higher than that if you want a safe REIT, but even W.P. Carey's emphasis on conservative industrial and warehouse properties could be vulnerable if the economy starts to suffer this year.
