Companies with high trading volume may not always be a great investment option. Many stocks to avoid are not the best picks for investors looking for long-term gains. Investors looking for robust companies with positive trajectories should consider more than just their popularity. Several stocks without a large trading volume amount offer investors great opportunities. Pay attention to other less flashy metrics for stocks, such as cash flow, revenue, net income, earnings per share and return on equity.
The stocks to avoid below have a massive amount of trading volume but are on a downward trend.
Lucid Group (LCID)
Lucid Group (NASDAQ:LCID) is an electric vehicle manufacturer in Newark, California. They also develop and build electric vehicle batteries and powertrains. Their flagship vehicle at this time is the Lucid Air, which is a luxury sedan. Their new luxury SUV, the Lucid Gravity, should roll out in late 2024.
Lucid Group’s share price fell 44% in the last six months due to changes in leadership and profitability concerns. On Nov. 7, they reported earnings results for the third quarter—a drop of 29% and a 19% increase in net loss compared to the third quarter of 2022. Lucid Group expected to deliver over 10,000 vehicles in 2023 but delivered around 8,000 vehicles in their third-quarter earnings report.
On Nov. 7, Lucid Group announced the appointment of its new Chief Operating Officer, Marc Winterhoff. On Dec. 11, they reported that Chief Financial Officer Sherry House would leave the company.
AMC Entertainment Holdings (AMC)
AMC Entertainment Holdings (NYSE:AMC), located in Leawood, Kansas, is a movie theatre operator with over 900 theaters in the U.S. and other international locations.
After the last six months, its share price fell 84%. Due to the company’s innate volatility, negative cash flow from operations and its reverse stock split initiated back in August, it’s one of the stocks to avoid. On Nov. 8, AMC Entertainment reported its 2023 third-quarter earnings, stating a net income of $12 million. For the third quarter of 2022, it reported a net loss of $227 million comparatively. Revenue grew 45% within the same period.
AMC Entertainment has had a 38% rise in total attendance comparing Q3 2022 and Q3 2023. For the third quarter of 2023, AMC has positive attendance, revenue and income results. However, investors are still unsure of the company’s trajectory due to negative cash flow.
Medical Properties Trust (MPW)
Medical Properties Trust (NYSE:MPW) is headquartered in Birmingham, Alabama, and operates as a healthcare real estate investment trust (REIT). It is one of the largest non-governmental owners of hospitals globally. They have over $9 billion in assets, and their portfolio consists of more than 400 healthcare facilities and properties in the U.S., the United Kingdom and other European countries. Acute care hospitals comprise 64%, behavioral health facilities include 13%, rehab hospitals comprise 8%, and other similar facilities comprise the remainder.
Real estate investment trusts (REITs) typically offer a much higher dividend yield than other industries. They are legally obligated to provide investors with 90% of their taxable income through dividend payments. They offer an annual dividend yield of 12.22%, paid out quarterly with their most recent dividend payment of $0.15 per share.
Medical Properties Trust’s share price fell 56% last year due to reduced earnings and a high short interest of 25% in the company. On Nov. 9, they reported earnings for the third quarter, which stated that revenue dropped 13% and net income fell 47% compared to the year before.
As of this writing, Noah Bolton did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
