Stocks dipped and rose as Wall Street closed out 2023, but certain equities remained stuck in the mire despite the overall market surge. Looking back, portfolio gurus recently singled out Alibaba Group, Steelcase, and JD.com, forecasting underperformance that overlooked minor gains for the week. Although the S&P 500 index gingerly ascended, the columnist admitted to missing the mark occasionally, noting a 61% hit rate in 114 milestones within the finance cosmos.
Predicting stock movements on a weekly basis, an eminently wielding strategy, will give way to a more moderate approach in the writer’s craft. Turning attention to a broader horizon, the focus shifts to 2024 and three distinguished names poised for potential stumbling in the upcoming year: the ever-present Apple, Cal-Maine Foods, and Tesla Motors.
1. Apple’s Road Ahead
Apple’s financial journey has oscillated between promising peaks and mediocre baselines over the past decade. A roller-coaster fiscal trajectory of erratic high-altitude revenue growth and sporadic plummeting numbers signals a volatile track record for the tech giant. Forecasts for the upcoming fiscal year project a tepid revenue increase of under 4%, nudging up to a modest 6% in the following year.
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While a proponent of Apple’s consumer tech offerings, the writer remains skeptical about its market dominance, manifesting as a current share price that appears incompatible with tepid growth. Apple’s stock valuation, currently trading at more than 30 times trailing earnings, raises eyebrows in light of diminishing top-line expansion and net earnings downturn in 2023.
2. The Downward Spiral for Cal-Maine Foods
The avian powerhouse, Cal-Maine Foods, finds itself perched precariously on the edge, its earnings poised to take a nosedive. Once enjoying an abundant yield from soaring egg prices, its profitability seems set to drop drastically with anticipated year-over-year revenue and earnings per share registering a stark 34% and 83% decline, respectively.
3. Tesla’s Bumpy Ride
Tesla, revered as a beacon of electric mobility, faces an uncertain road ahead after unprecedented stock growth in 2023. A rocky revenue trajectory and waning profitability amid a necessary price slash portend a disruptive path for the electric vehicle behemoth in 2024. Loyalty among consumers may meet turbulence with the creeping invasion of non-Tesla vehicles at Supercharger stations and a discernible drop in resale values over the past year.
The looming uncertainties for these three stocks substantiate the sage advice to exercise caution in their regard. Bolstering this are battle-tested market mantras that emphasize the hazards of investing in presumed ‘safe stocks.’