The stock market is getting a little hot in places. With money flooding into stocks, we need to be wary of overcrowded trading. In other words, don’t buy a stock just because everyone else does. Instead, you should focus on finding value. Today I’m going to highlight two stocks that I avoid at their current prices.
No longer No.1
tesla (NASDAQ:TSLA) was once a dominant player in the electric vehicle market. Renowned fund manager Cathie Wood once said of Tesla:well-positioned to take advantage” Market. That’s no longer the case. BYD It surpassed Elon Musk’s company in terms of shipments.
The Austin-based company has actually seen a drop in deliveries over the past 12 months. Tesla announced in early April that it delivered 386,810 vehicles and produced 433,371 vehicles in the first quarter. In comparison, the company delivered a total of 484,507 vehicles in the fourth quarter of 2023 and 422,875 vehicles in the first quarter of 2023.
As a result, profit margins and profits also declined.
From an investment perspective, this is not a problem if the stock is trading at a P/E ratio of 10 to 20 times. But that’s not the case. Tesla trades at approximately 61.2 times forward earnings and has a price-to-earnings growth ratio of 5.95. The latter infers that the company is highly overvalued.
I think the main factor that stopped the stock price from plummeting was Musk’s announcement that he would be unveiling the long-awaited robotaxis on August 8th. I have no idea if it’s excitement or a distraction technique.
Robotaxis have the potential to provide a high-margin revenue stream, but everything I’ve read says they won’t be on our roads completely driverless for a decade. .
very conservative stocks
Trump Media & Technology Group Founded by Donald Trump (NASDAQ:DJT) is a media and technology company founded in 2021. The company went public in March after shareholders voted to take it public.
Its main platform is Truth Social, a social media app aimed at Trump supporters and other conservatives. Although the initial user numbers have increased to some extent, we are entering a highly competitive environment and over time, it could be very difficult to displace the big media players. Since then, the stock price has fallen from about $78 per share to about $32 per share at the time of writing.
On the plus side, the Truth Social platform has around 1 million monthly active users, which is pretty strong. We have also been quite successful in increasing revenue.
However, with a market capitalization of $1.9 billion, the market currently values each monthly active user at $1,900. This is a very high number compared to major media.
It’s also worth remembering that Company X has struggled to retain advertisers since Musk’s acquisition. Truth Social is very niche and very conservative. This is not the kind of platform that most companies gravitate towards as advertisers.
Here are two stocks in today’s stock market that you don’t want to touch on your vergepole. appeared first on The Motley Fool UK Edition.
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James Fox has no position in any stocks mentioned. The Motley Fool recommends Tesla. The views expressed on the companies mentioned in this article are those of the writer and may differ from official recommendations we make on subscription services such as Share Advisor, Hidden Winners, or Pro. At The Motley Fool, we believe that considering diverse insights makes us better investors.
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