Category Archives: stocks to avoid

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4 prestigious giants set to slash their dividends

Here we go again with one of my favorite contrarian topics: Buckle up, the dividend butcher is sharpening his axe once more! Four prestigious dividend stocks once deemed safe havens are poised to slash their generosity to ribbons. With worsening fundamentals, overstretched balance sheets and drying cash flows in a challenging environment, these firms will likely need to trim the fat from their dividends in the not-too-distant future.

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PepsiCo – refreshing buy or just a crushed can?

The stock of soft drinks and snacks giant PepsiCo over the last five years has done exactly nothing. Dividends were the only form of returns, but this will hardly make investors high-five this market-lagging performance. With a just raised-again dividend, a yield on the high-end of the historical range, a comparatively low PE ratio of 16x and an uncertain economic environment, this consumer staple company might qualify for a defensive portfolio.

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Pernod Ricard yields 5% – convincing enough?

Pernod Ricard’s stock has taken an almost unthinkable tumble, plummeting from a spirited high of over 200 EUR not too long ago in 2023 to even below 100 EUR now. That’s a 50% nosedive in just two years, while the broader markets – until they got a bit tipsy a few months back – were toasting new highs. The more so shocking, as Pernod Ricard is seen as a “recession-proof, high-quality company with valuable brands”. Is this a rare chance to grab a premium spirits stock at a bargain, letting its value intoxicate your portfolio? Or could it trap you in a value hangover?

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Searching for recession- and tariff-protection

Like I hinted in my outlook for 2025, this year indeed so far has proved to be rather volatile. Sentiment can change almost on a day-to-day basis, depending on political announcements. Even wild swings of 7–10% in just one day are not impossible. Under these circumstances, it makes sense to think about more defensive stocks, assuming the tariff circus continues and / or a recession hits soon. There are the usual suspects which can do the job. But I wouldn’t expect too much upside. My members have already received my next stock idea – one of the most defensive, recession- and tariff-unaffected businesses available – paired with decent upside.

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Is South Africa’s Sasol a steel at 0.4x book value?

Once a 40 bn. USD heavyweight, South Africa’s energy and chemicals company Sasol has imploded to a market cap of less than 3 bn. USD. South Africa primarily makes negative news, as the country is coping with political instability, a weak economy, high unemployment, the world’s highest inequality, a fragile energy and electricity supply and even recently announced legally allowed expropriations of white people. In this environment, the currency depreciated strongly. Is now the time to look for bargains in this crisis-ridden environment? A look at South Africa’s (former) giant.

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Consumer staples got eaten for lunch – Part II – Alcohol stocks

After my take on food stocks, in today’s second part of the series I am having a look at another failed group of consumer darlings – alcohol producers. These “sin stocks”, similar to tobacco, have been seen for long as one of the best ideas to play defense. Especially in crises, it was said people would smoke and drink even more. The only difference: valuations. While most tobacco stocks today are deep-value plays, alcohol stocks for a long time have had rather rich multiples. Frustrating for those who only looked at the perceived quality of the companies, but not their risks. With many alcohol companies trading substantially below their highs, is now the time to get active?

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Will Altria’s stock thrive under Trump 2.0? + new research report

Although the tobacco story seems to be well-known and boring, a few things have happened in the recent past. The feared menthol ban is now off the table. And with a more corporate-friendly administration Trump 2.0, there’s a good chance tobacco companies won’t be further pressured. Marlboro-maker Altria massively outperformed the S&P 500 over the last twelve months with double (!) the latter’s return. Does Altria now belong into a well-suited stock portfolio? My Premium PLUS members receive my latest stock idea – an indirectly tobacco- / nicotine-related company with the potential to be a multi-bagger already by year-end.

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Old money doesn’t go out of style – Ralph Lauren + new research report

Whether markets go up or down, it seems as if the spotlight only belongs to stocks linked to the sectors of tech, certain resources like uranium, lithium and maybe some oil and gas as well as the typical dividend stories. However, in the background and barely noticed by the broader public an entirely different name has made a ferocious comeback – Ralph Lauren. Boring for some, timeless for others, shares of RL outperformed the S&P 500 over the last one, three and five years (and even quarter-century). Not by little, but by a wide margin. Even before dividends. So, what’s in store for this iconic name?

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Retail crowd’s favorite REITs: disappointment likely to continue

REITs, or real estate investment trusts, are an asset class that is typically followed and bought by investors with a focus on cash flows in the form of dividends. One of the main arguments is that this way they don’t have to bother about stock price fluctuations, as their dividend income is safe. Sounds logical, but the long-term performance of three highly celebrated such REITs is simply weak. The worst thing, I am expecting this trend to continue or even to worsen.

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Berkshire Hathaway – an inferior stock pick now

Risking to be accused of blasphemy with this Weekly by one or the other Buffett-fan, nonetheless I decided to have a look at the stock of Berkshire Hathaway. Warren Buffett’s investment holding has achieved a tremendous performance and beaten the markets by a wide margin since its inception. However, this was not the case in the younger past. Growth constraints are one reason. But there are quite a few other aspects that do not make this conglomerate appear to be the ultimate must-own stock.

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