It was another rough week to be the long the market, so let's see how my "three stocks to avoid" column fared last week. The three stocks I thought were going to lose to the market -- Tesla Motors (TSLA +0.20%), Kirkland's (KIRK 2.78%), and Vera Bradley (VRA 1.14%) -- sank 6%, 3%, and 23%, respectively, averaging out to a 10.7% decline.
The S&P 500 experienced a 3.3% move lower. I was right. I have been correct in 30 of the past 46 weeks.
Now let's look at the week ahead. I see RH (RH 5.12%), National Beverage (FIZZ +1.51%), and Coinbase (COIN +5.38%) as stocks you may want to consider steering clear of this week. Let's go over my near-term concerns with all three investments.
Image source: Getty Images.
1. RH
Housewares specialists and furniture retailers have been feeling mortal lately. We'll see how the company formerly known as Restoration Hardware is holding up when it reports fresh quarterly results shortly after Thursday's market close. RH has carved a potent niche as a luxury lifestyles retailer, but even upscale players aren't immune to the inflationary pressures that find folks spending more on essentials like food, gas, and shelter.
June was brutal for the chain, as it hosed down its full-year guidance not once -- but twice. With market sentiment souring since June it's hard to fathom since getting better with this week's financial update.
RH was a big winner early in the pandemic, as hunkering down meant sprucing up digs and Zoom. After seven consecutive quarters of double-digit sales growth, we've hit a wall. Investors are bracing for a year-over-year decline for the current quarter as well as for the entire fiscal year.
NYSE: RH
Key Data Points
2. National Beverage
The company behind La Croix hasn't been as fizzy as its signature sparkling water. Revenue growth has slowed dramatically lately, clocking in at a 4% compounded annual growth rate over the past three years. Analysts see single-digit top-line growth continuing in the near future. La Croix had its moment in the sun, but it's canned laughter these days with several companies diving into the flavored sparkling beverage niche.
National Beverage is expected to post quarterly results on Wednesday. The report may be more flat than fizz. It's not just the slowdown in revenue over the past few years. National Beverage has also fallen short of Wall Street's profit targets in each of the past four quarters.
NASDAQ: FIZZ
Key Data Points
3. Coinbase
A lot of slumping growth stocks have been bouncing back this summer, and Coinbase has made the most of the recovery. The stock is up 60% since bottoming out in May. The same can't be said about the cryptocurrency market.
Most crypto denominations are lower -- often a lot lower -- than they were in May. A few high-profile platforms buckled, rattling the faith of investors in digital currencies. Revenue has suffered big sequential declines in back-to-back quarters, and the market's banking on seeing that streak of quarter-over-quarter slides stretch to three periods soon.
NASDAQ: COIN
Key Data Points
It's going to be a bumpy road for some of these investments. If you're looking for safe stocks, you aren't likely to find them in RH, National Beverage, and Coinbase this week.
