I took a look at three stocks to avoid last week, predicting that Nikola, Lemonade, and Chuy’s were going to have a challenging week. I fell short of the mark.
- Nikola shares revved 11% higher, as the aspiring maker of electric vehicles bounced back after a rough run.
- Lemonade shares became 2% lighter for the holiday-shortened trading week. The AI-savvy provider of insurance was one of 2020’s hottest IPOs.
- Chuy’s investors experienced a 5% dip. The casual dining Tex-Mex chain hit another new high to start the week, but it didn’t stick.
The three stocks averaged a 1.3% advance. The S&P 500 moved 1.4% higher in that time, offering me the narrowest of victories. This week, I see Blink Charging (NASDAQ:BLNK), Baidu (NASDAQ:BIDU), and Lyft (NASDAQ:LYFT) as vulnerable investments in the near term. Here’s why I think these are three stocks to avoid this week.
With 2020 in the books I get why Blink Charging investors are taking a victory lap. The stock was up 2,198% — nearly a 23-bagger — to become one of last year’s undeniable game-changing champions. Now ask yourself why a company with just $4.5 million in trailing revenue is trading for more than 300 times that multiple.
If you’re a bull, you will argue that Blink Charging is like driving itself: You have to look at the windshield to see what’s coming, rather than the rearview mirror to see what you’re leaving behind. The problem is that it’s not as if the future for the provider of electric car-charging stations and related offerings is going to earn its nearly $1.4 billion market cap anytime soon.
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