Stocks to sell

3 Battered Blue-Chip Stocks to Sell in December

The market continues to rip higher in November, with the S&P 500 up 9% since Halloween. However, not all stocks are participating in the rally.

While tech stocks lead the way, a number of well-known blue-chip names are falling further and further behind. Many companies that have been around for decades and are household names can’t seem to get out of their own way. While inflation and high interest rates are taking a toll, many companies are seeing their share prices decline and miss out on the current rally due to problems of their own making.

Analysts continue to revise down their earnings projections and investor sentiment is getting worse. In this case, it would be best to avoid these losing stocks altogether and concentrate on securities that are marching higher. Here are three battered blue-chip stocks to sell in December.

Barclays (BCS)

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Things appear to be going from bad to worse at Barclays (NYSE:BCS) bank. The British lender that was founded in 1690 has just announced its intention to cut 2,000 jobs as part of a $1.25 billion cost reduction plan. Most of the jobs will be eliminated in the bank’s back office as Barclays seeks to improve its profitability. The company has reduced its expenses in recent years by cutting or eliminating bonuses, as well as jobs in its retail and investment banking units. This is its first recent move against back office staff.

Barclays says the latest cuts are part of its effort to achieve a cost savings goal of 7% of the bank’s annual operating expenses of $18 billion. Senior management is under pressure to boost the bank’s share price ahead of an investor presentation scheduled for February 2024. Plus, Barclays is still trying to recover from poor bets made by its investment banking unit that cost the bank hundreds of millions of dollars in losses. BCS stock is down 9% this year and down 13% over five years.

Bayer AG (BAYRY)

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Still in Europe, we have German pharmaceutical giant Bayer AG (OTCMKTS:BAYRY), which has been a going concern since 1863. The company, which famously discovered and still makes Aspirin, saw its share price recently plummet 20% on news that it has ended a late-stage trial of its blood thinner medication Asundexian. In a written statement, Bayer said it stopped the trial of the anti-thrombotic drug due to data that did not support the medication’s intended benefits.

Specifically, Bayer said that Asundexian was found to be inferior in preventing strokes in high-risk patients than other available medications. Investors did not take the news well as the blood thinner was expected to be a blockbuster medication for Bayer. The company had hoped that Asundexian would help to replace revenue from its existing blood thinner Xarelto, one of its biggest selling drugs, which loses patent protection in 2026.

The canceled drug trial was announced days after Bayer’s Monsanto business unit was ordered by a U.S. court to pay $1.56 billion to three people who developed cancer after using the company’s Roundup herbicide product. Bayer’s stock is now down 32% this year and down 52% through five years.

Charles Schwab (SCHW)

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Stateside we have brokerage and financial services company Charles Schwab (NYSE:SCHW) whose share price is down 31% this year with no recovery insight. Part of the decline this year has been due to a general downturn in stocks of banks and investment firms. However, Charles Schwab’s stock has also been dragged lower by uninspiring financial results and the company’s sensitivity to higher interest rates. Charles Schwab, which is the largest publicly traded U.S. brokerage firm, has cited inflation and high rates for its tepid earnings.

The company reported earnings per share (EPS) of 77 cents, which was better than the consensus expectation of 75 cents among analysts. Revenue for the third-quarter totaled $4.61 billion versus estimates of $4.65 billion. However, revenue was down 16.3% from a year ago. The investment house also said that its net interest revenue dropped 23.5% during Q3. Perhaps worse, revenue from trading activities declined 17.4%. New brokerage accounts in the quarter were flat from a year ago. SCHW stock is down 40% from a peak it reached in January 2022.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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