Category Archives: stocks to avoid

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Side Effect of AI: The Storage Bubble + New Research Report

It is no secret that AI as a topic, its various applications, and in consequence stocks related to AI are receiving much attention. More and more challenge the sustainability of this rapid rise over the last few years, especially as the question of profitability remains unanswered. While everyone is aware of stocks like Nvidia, Oracle or critical suppliers like Micron, as well as multiple AI chatbots, the AI mania has pulled up an otherwise boring sub-segment: storage stocks. Is this justified? All my paid-members receive my latest stock idea: a growing franchise that’s set to dominate the eye care market.

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Nomad Foods: Tasty Deal?

In the spotlight today is the Western European market leader in the frozen food industry. With a portfolio of multiple brands, the company’s roots span over a century. The current setup was formed in 2015, when the brands Iglo and Findus were acquired. Since the IPO, a decade has passed, yet the stock is trading (again) where it had started. Are a near 5% dividend yield and a PE ratio of 7 enough to spark appetite, or is something fishy?

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Diageo – Does Johnnie keep on stumblin’?

Though initially not planned as a trilogy in that sense, today I am taking a closer look at Diageo, the world’s biggest spirits company. Like its competitors Pernod Ricard and Brown-Foreman, Diageo stock has nosedived, and caused strong headaches for its investors. After the stock got cut in half, while the broader market ran from high to high, the question arises, whether this could be a good contrarian pick right now. Especially with the dividend now being on a historically high level.

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(Un)Safety first: The Drama of Sarepta Therapeutics

Biotech stocks are known for two things: either being graveyards for shareholders’ money or generating outsized returns – especially if they become multi-baggers (assuming one is positioned before the retail crowd discovers such ideas). While not every biotech stock turns out to be a do-or-die binary bet, it is safe to say that those stocks with big moves catch much attention – no matter the direction. Sarepta Therapeutics is such a case. It has even offered its shareholders both, an astronomical rise and a fall from grace despite generating billion-USD sales. A case study worth to have heard of.

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PVH Corp.: Trading at 6x earnings – still not a buy

While it likely makes sense to be cautious when a stock trades at a high valuation multiple, the case of PVH Corp. might raise some eyebrows – at least at first sight. The company owns two well-known apparel brands, has been constantly profitable, is generating healthy free cash flow and even buying back its own shares aggressively at a low valuation, seemingly generating strong shareholder value. Shares, however, only trade at a 6x price to earnings ratio. I’ll tell you while this likely is still not a bargain.

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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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