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25 Stocks to Sell Before Earnings Season

July 21, 2016

For those of you who are invested in the stock market, I have some bad news and some good news. The bad news is that this earnings season, the S&P 500 is headed towards its sixth consecutive quarter of sales declines, and its fifth consecutive quarter of earnings declines. Already, we've seen a number of big blue chips knocked down a peg, including Halliburton (HAL) and Netflix (NFLX).

And, with the market's 500 biggest companies forecasted to post a 5.5% drop in earnings, there will be more disappointments to come. I must also mention that typically the stronger earnings announcements are released earlier in earnings season.

The good news is that you can take steps to protect your portfolio. In many cases, there are red flags that can help you avoid the worst earnings offenders. One thing that I rely on personally is my Portfolio Grader stock screening tool. If you're not already familiar with it, Portfolio Grader rates stocks according to their Quantitative Grade and their Fundamental Grade. The Quantitative Grade measures how much money is flowing into a stock, which is a strong indicator of upside potential. The Fundamental Grade is a weighted average of eight critical fundamentals, including sales growth and earnings growth.

Portfolio Grader generates stock report cards that can help you make informed investing decisions. I use it constantly, especially before and during earnings season. For example, if you had plugged in either HAL or NFLX into Portfolio Grader, you would have seen that both stocks are C-rated holds (at best). So you would have known not to add these stocks leading up to their respective earnings reports.

Next week is going to be crunch time for earnings season, with 191 companies in the S&P 500 reporting their quarterly results. To prepare, I've compiled a list of 25 big-name blue chips that you may want to consider selling before then. Let's take a look:

Ticker Name Total Grade Quantitative Grade Fundamental Grade Earnings Date
AAPL Apple Inc. D F C 26-Jul
ALXN Alexion Pharmaceuticals, Inc. F F C 28-Jul
ANTM Anthem, Inc. D D C 27-Jul
BA The Boeing Company D D C 27-Jul
BWA BorgWarner Inc. D F B 28-Jul
CELG Celgene Corporation D F B 28-Jul
COG Cabot Oil & Gas Corporation D D D 29-Jul
COP ConocoPhillips D D D 28-Jul
ESRX Express Scripts Holding Company D D B 25-Jul
GILD Gilead Sciences Inc. D D C 25-Jul
HBI Hanesbrands Inc. D D B 28-Jul
HCA HCA Holdings, Inc. D D B 28-Jul
ILMN Illumina Inc. D F C 26-Jul
LYB LyondellBasell Industries N.V. D D B 29-Jul
MCK McKesson Corporation D D B 27-Jul
MPC Marathon Petroleum Corporation F F D 28-Jul
NOV National Oilwell Varco, Inc. D D D 28-Jul
QRVO Qorvo, Inc. D D D 28-Jul
RCL Royal Caribbean Cruises Ltd. D D B 28-Jul
STT State Street Corporation D D C 27-Jul
VRTX Vertex Pharmaceuticals Incorporated D F C 27-Jul
WFM Whole Foods Market, Inc. D D C 27-Jul
XL XL Group plc D D C 27-Jul
XRX Xerox Corporation D D C 29-Jul
ZION Zions Bancorporation D D C 26-Jul

I'll continue to keep you briefed on the latest earnings news in this daily blog, so please stay tuned!

Sincerely,

Louis Navellier

Louis Navellier

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