3 Ultra-Popular Stocks To Avoid Like The Plague In August

Stock Exchange, Courses, Shares, Trading, Forex

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After a volatile week, all the major U.S. benchmark indices bounced back ahead of a key July labor market report. The S&P 500 finished at a new all-time high of 4,429.10 on Thursday, as energy and travel stocks recovered after struggling over the past couple of weeks on investors’ concerns over the rapid spread of the Delta variant of the coronavirus.

While the major stock market indexes indicate a bullish sentiment, not all popular stocks are good bets now. Although the social-media-hype led to the skyrocketing rally of some stocks, their weak fundamentals and financials could trigger a brutal decline in their share prices.

Popular stocks NIO Inc. (NIO), AMC Entertainment Holdings, Inc. (AMC), and Sundial Growers Inc. (SNDL) enjoyed the limelight solely because of the social-media hype. However, since their current price levels do not match their bleak growth potential and underlying fundamentals, we believe these stocks are best avoided.

NIO Inc. (NIO)

NIO is a China-based manufacturer and seller of smart, high-performance electric vehicles. It is involved in producing smart electric sedans and five, six, and seven-seater electric SUVs. In addition, the company provides energy and service packages, pick up, charging, and return services, as well as battery swapping services.

In July, the company delivered 7,931 vehicles, compared to 8,083 vehicles in June 2021. Its cumulative deliveries of the ES8, ES6, and EC6 stood at 125,528 vehicles as of July 31, 2021. NIO’s five-seater high-performance premium smart electric SUV deliveries reached 3,669 in July, compared to 3,775 in June.

NIO’s vehicle sales increased 489.8% year-over-year to RMB7,405.8 million ($1,130.3 million) in the first quarter ended March 31, 2021. However, the company’s non-GAAP loss from operations came in at RMB199.4 million ($30.4 million), and non-GAAP net loss amounted to RMB 354.6 million ($54.1 million).

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TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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