Finding the right stocks to sell is also vital in stock investing, like figuring out which ones to buy. Three stocks should be sold to protect portfolios against further declines. These businesses are excellent candidates for sale because of their severe financial weaknesses.

Specifically, the companies here rely excessively on one-time earnings to sustain profitability, which raises serious concerns with debt management. Additionally, there are challenges with diminishing gross billings and revenue. Due to growing non-performing loans (NPL) and provisions, the potential for their expansion hurts.

As a result, these vulnerabilities make these companies prime candidates for the stocks to sell list, providing caution to mitigate risk and safeguard investment capital. One can navigate the unpredictable market by understanding these stocks’ financial and operational shortcomings. It means avoiding stocks that may erode the investment value.

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Overall, the financial red flags indicate potential risks and undermine the companies’ long-term growth prospects.

Stocks to Sell Before July: Dynagas (DLNG)

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Dynagas (NYSE:DLNG) leads in liquefied natural gas (LNG) shipping. The company’s Q4 2023 net income of $10.5 million represented a 9.5% year-over-year (YoY) decline. This decline derives from certain variables, including unrealized gains on interest rate swaps and the lack of profits from debt extinguishment.

Although 2023’s adjusted EBITDA of $94.4 million reflects operational strength, the Q4 drop reflects that the growth trajectory is unsustainable if the company fails to address the underlying debt commitments. Moreover, the company’s dependence on modified measures implies that to sustain profitability, the company may need the required operational edge.

Further, since December 2019, Dynagas has been actively lowering its leverage. The effort reflects the considerable drop in the net leverage ratio from 6.6 times to 3.7 times. However, given the high expiring debt, the company’s continued efforts to decrease debt may need to be revised to lessen the risks tied to the debt maturity in September 2024. Although it has demonstrated sharp financial success, its dependence on one-time profits and problems with debt management qualify it for the stocks to sell list.

TD Synnex (SNX)

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TD Synnex (NYSE:SNX) is one of the lead distributors of technology offerings. In Q1 2024, net revenue decreased by 7.6% YoY to $14 billion. Meanwhile, total gross billings decreased by 5% YoY to $19.3 billion. It is concerning that both revenue and gross billings have decreased. Additionally, there was a 7% YoY fall in the Endpoint Solutions section, which weakened this important business area. A reduction in the performance of the core business may ensure the total growth potential is maintained.