The rally since the beginning of the year has been more or less unrelenting, with more than 1,100 companies currently trading within 5% of their 52-week highs. For optimists, these rallies may seem like a dream come true. For skeptics like me, they're opportunities to see whether these companies have earned their current valuations.
Keep in mind that some companies deserve their current valuations. Nothing is a more hot-button issue than whether Apple
Still, other companies might deserve a kick in the pants. Here's a look at three companies that could be worth selling.
Not quite a banner year
Much of the banking sector finally appears to be on the mend, though some banks have further to go than others. Bank of America
One such company is Banner Bank
Finally, a natural gas sell candidate
I may be one of the biggest natural gas bulls of late, but even I draw the line at Clean Energy Fuels
The truly damaging news this past week came from a combination of General Electric and Chesapeake Energy, which are teaming up to create 250 CNG fueling stations around the country, as reported by the Fool's own Travis Hoium. The market for CNG vehicles is still in its infancy, and another competitor is the last thing this company needed. I'm switching the nozzle to "off" on Clean Energy Fuels.
I admit that I'm just not a fan of golf, and that makes it easy for me to pick on Callaway Golf
The maker of golf-related equipment has been in what seems like a continuous downward spiral since the recession. Callaway has missed Wall Street's earnings estimates in three of the past four quarters, and its losses have widened as a result of a business restructuring. If that's not enough, the company also recently went through a CEO change. It's incredibly tough to trust Callaway's turnaround when peers Nike and Under Armour are having no problem garnering new customers and getting top-notch ambassadors under their belt. Buying Callaway after its recent performance is like aiming directly at the bunker. Thanks, but no, thanks!
This is what I call a "prove it" week! These three companies have high expectations built into their stock prices, and I say you make them all prove their worth before you buy. I'm so confident in my three calls that I plan to make a CAPScall of underperform on each one. The question now is: Would you do the same?
Share your thoughts in the comments section below, and consider using the following links to add these three stocks to your free and personalized Watchlist so you can keep track of the latest news on each company. And to avoid investing in stocks like these, consider getting a copy of our special report, "The Motley Fool's Top Stock for 2012." In it, our chief investment officer details a play he dubbed the "Costco of Latin America." Best of all, this report is free for a limited time, so don't miss out!
Fool contributor Sean Williams owns shares of Bank of America but has no material interest in any other companies mentioned in this article. He didn't yell "fore" and ended up hitting someone in the back with a golf ball many years ago. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of Apple, Bank of America, and Under Armour. Motley Fool newsletter services have recommended buying shares of Apple, Nike, Under Armour, and Chesapeake Energy, as well as creating a bull call spread on Apple and a diagonal call position in Nike. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy that never needs to be sold short.