Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Tesla Motors Inc (TSLA), Netflix, Inc. (NFLX): Four Stocks I Don’t Want to Own in July

Page 1 of 2

Earnings are the single greatest catalyst for stocks, and in this piece I am looking at five stocks that could see significant volatility with earnings in July, presenting too much risk for me.

Tesla Motors Inc (NASDAQ:TSLA)

#4 Unrealistic Expectations?

Netflix, Inc. (NASDAQ:NFLX) is one of the market’s “cult stocks,” a very volatile name that has rallied 250% over the last year. During its last quarter, the stock surged more than 25% after beating expectations and posting top-line growth of 17%.

Now, the stock is significantly more expensive at 3.15 times sales with a forward P/E ratio of 73; and expectations have slowly crept higher. This is a company that has seen a great deal of subscriber growth, but various analysts including those at Bernstein are saying that subscription growth expectations are now unrealistic.

Therefore, while I do like the direction of this company long-term, I think its gains and valuation present a great deal of risk heading into earnings on July 24, and I would not own the stock.

#3 Several Warning Signs

Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) and Netflix, Inc. (NASDAQ:NFLX) are joined at the hip, despite trading in two different industries, as bullishness for one often reflects well on the other. Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) is yet another cult stock, meaning it’s a stock where irrational exuberance often occurs abruptly and without warning. For this reason, you have to be worried into earnings on July 29.

Like Netflix, Inc. (NASDAQ:NFLX), Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) has seen massive annual gains, up 255%. The company has seen strong gains as coffee prices have hit a 47-month low, but many analysts now predict that this trend will soon reverse, increasing Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR)’s costs.

With very similar growth to Netflix, Inc. (NASDAQ:NFLX), the factor that makes Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR) riskier is that 33.9% of its float is short, compared to 20% for Netflix, Inc. (NASDAQ:NFLX). Moreover, insiders have sold about a million shares this year, while buying none. Combined, I view these factors as risky, and would be very careful with this stock.

#2 Keeping My Fingers Crossed

There is no company that I’d like to see crush earnings expectations more so than YRC Worldwide, Inc. (NASDAQ:YRCW). The stock is higher by 330% over the last three months, after the company posted its first operating profit in a decade during its last quarter.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!