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Three Sectors to Avoid Under the Trump Administration

January 20, 2017

Today, Donald Trump will take the oath of office, becoming the 45th President of the United States. Inauguration Day kicks off a new era for the country, both on Main Street and on Wall Street.

So, over the past few days, I've posted a special Presidential series. On Wednesday, I offered my predictions for 2017 and beyond. On Thursday, I identified four winners of the Trump era, including top stock picks from Blue Chip Growth, Emerging Growth and Dividend Growth.

Today, I'll discuss the other crucial side of investing: The stocks and sectors that should be sold for now. And what I'm about to say may surprise you.

Be Very Careful with Financial, Industrials and Materials Stocks

In the weeks following Election Day, there were several sectors that rallied strongly, including financials, industrials and materials. However, much of this rally was fueled by short-covering, so it wasn't sustainable. So while there was a lot of hype surrounding these sectors, I largely recommend that you avoid these sectors in 2017.

The reason why is simple: All of these sectors are characterized by lackluster or negative earnings and sales growth. In fact, many market bellwethers missed earnings estimates in the latest quarter—and barely 15% of mega-cap stocks have solid fundamentals. And that's not going away any time soon.

Many multinational companies will continue to struggle to keep their heads above water in the first few quarters of 2017. And that's because of the strong U.S. dollar. The fact is that the U.S. dollar is at the highest level against the euro in over a decade, and it's also rising against the British pound and the Japanese yen. As a result, the U.S. dollar is wreaking havoc on multinationals' top and bottom lines.

Over the past few weeks, big multinationals in the financial, industrial and material sectors have pulled back, as Wall Street realized these companies didn't have the fundamentals to support their yearend surge higher…

49 Stocks to Sell Immediately

So my advice to you is to ignore the recent rally in financial, industrial and material stocks. In fact, my Portfolio Grader system has identified 49 stock market giants that you should sell immediately. Consider the list below. Cross-check with your own portfolio. And if you own any of these losers, sell immediately because they have the potential to blow a hole in your portfolio this year.

24 Financial Stocks to Avoid
Symbol Company Name Quantitative

Grade

Fundamental

Grade

Total

Grade

AEG AEGON F C D
ALLY Ally Financial Inc D C D
AMG Affiliated Managers Group Inc. F C D
AMP Ameriprise Financial Inc. D D D
BBVA Banco Bilbao Vizcaya Argentaria D C D
BCS Barclays PLC D C D
CIT CIT Group Inc. D D D
CS Credit Suisse Group AG F C F
FNF Fidelity National Financial Inc. D C D
HSBC HSBC Holdings plc D D D
IBN ICICI Bank Limited D C D
IVZ Iesco Ltd. F C F
LYG Lloyds Banking Group plc F D F
MET MetLife Inc. D C D
MKL Markel Corp. F D D
NYCB New York Community Bancorp Inc. D C D
PUK Prudential plc F C F
RBS Royal Bank of Scotland Group plc F C F
SBNY Signature Bank F C D
UBS UBS Group AG D C D
VOYA Voya Financial Inc. D D D
WFC Wells Fargo & Company F C D
WLTW Willis Towers Watson Plc F D D
XL XL Group Ltd F D D

15 Industrials Stocks to Avoid
Symbol Company Name Quantitative

Grade

Fundamental

Grade

Total

Grade

AER AerCap Holdings D C D
ALLE Allegion PLC F C D
AME AMETEK Inc. F C D
CEA China Eastern Airlines Corp. D C D
DAL Delta Air Lines Inc. D C D
FLR Fluor Corp. D D D
GE General Electric Company F C D
JBLU JetBlue Airways Corp. F C D
NLSN Nielsen Holdings Plc F C F
RHI Robert Half International Inc. F C D
ROP Roper Technologies Inc. D C D
RYAAY Ryanair Holdings Plc D C D
SNA Snap-on Incorporated F C D
SRCL Stericycle Inc. F C D
ST Sensata Technologies Holding F C D

7 Materials Stocks to Avoid
Symbol Company Name Quantitative

Grade

Fundamental

Grade

Total

Grade

BLL Ball Corp. D C D
CF CF Industries Holdings Inc. D F D
IFF International Flavors & Fragrances Inc. D C D
MOS Mosaic Company D C D
POT Potash Corp. of Saskatchewan Inc. D D D
PPG PPG Industries Inc. F D F
SHW Sherwin-Williams Company D C D

I hope you have enjoyed reading this special three-part series on investing in the Trump era. As we learn more about what changes are in store at the White House, I will continue offering my guidance through this daily blog, and through my premium newsletters. In the meantime, I hope you have a wonderful weekend, and I'll be back online on Monday morning with your latest Portfolio Grader upgrades and downgrades.

Until then,

Louis Navellier

Louis Navellier

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