SELL Alert: profits and purges – time to take some profits and cut some losses
17th February 2025 |
We’ve been reviewing our positions, looking at whether we should take some profits off the table with some of our big winners and cut away some of the stocks that have failed to deliver.
And we’ve decided that’s what we’re going to do. So let’s get into it…
Oklo (NYSE:OKLO)
Oklo has very much become the poster child for the nuclear energy and AI theme of 2024 and 2025. After the wild market volatility in August 2024, the stock has gone on to be one of the best performance rides in the market.
But it feels like it’s been on such a heater, that I wonder how much longer this run can last. While it may have long-term potential as a dominant player in small modular reactor (SMR) tech for the AI industry, right now, it does seem like it’s overblown on the thematic side of things and lacking in fundamental value.
The ride is as we’d hoped it would be. It makes sense now to de-risk the position and take some healthy profits off the table.
That locks in a 500% gain from our re-entry price of $8.84 and ensures a healthy profit for anyone that bought Oklo be it from our first entry or from our re-entry to the stock.
It also completely de-risks the capital in the position, allowing the rest of the investment to effectively “free ride” potential upside, while continuing to minimise downside. For the remaining half, we’re going to set a hard stop exit at $38. Again, that locks in the entire journey with this stock as profit. If the stock trades back to $38, then we would expect it’s heading much further south.
Action to take: sell half of Oklo (NYSE:OKLO) at a price of $52.75. With the remaining half, set a hard stop exit at $38 and let it “free ride” for further potential upside.
Centrus Energy (NYSE:LEU)
Centrus Energy has been on a similar rise off the back of the security of supply to the nuclear industry in the US. The potential for Centrus to supply HALEU to the nuclear industry is also promising. However, it too looks like it’s pumped higher on the thematic side of things and is still very underdeveloped with fundamental value.
I suspect, like Oklo, that there’s a lot of volatility to come. Therefore it makes sense here to de-risk this position too. While currently at a 182% gain for us, selling half makes sense, as well as setting a hard stop at $80.80 for the remaining half.
Action to take: sell half of Centrus Energy (NYSE:LEU) at a price of $113.99. With the remaining half, set a hard stop exit at $80.80 and let it “free ride” for further potential upside.
Now for the not-so-good outcomes…
We’ve looked at a number of stocks that have utterly failed to deliver on their promises, potential and thematic investment idea. Argo Blockchain (LSE:ARB)
Argo Blockchain is our UK bitcoin miner that got crushed in the 2023 “crypto winter”. On the verge of bankruptcy several times, the stock is down 97%.
We had hoped that even after heavy dilution to stay alive, the stock might rebound strongly with the rest of the mining industry, but that has just not eventuated. It’s at risk of delisting its secondary listing in the US unless the (likely) stock consolidates.
Overall, it just doesn’t seem like there’s the possibility anymore to recoup the heavy loss. We exit the stock for a heavy loss.
Action to take: sell Argo Blockchain (LSE:ARB).
Clean Power Hydrogen (LSE:CPH2)
Our timing on Clean Power Hydrogen came right as the green energy market was bursting in the UK and much of the global markets. As a developmental company only just now moving to commercialisation, we find ourselves down 82.4% on the investment. While the tech looks promising, the path to commercialise and draw in substantial revenues to recoup the losses seems slim.
The confidence in the company to justify the near 500% rise from here to just breakeven has disappeared. As such, we exit for a loss.
Action to take: sell Clean Power Hydrogen (LSE:CPH2).
Cyngn (NASDAQ:CYN)
When we were looking at Cyngn I found myself continuously baffled by this stock. In describing it to our publisher I put it like this: “Great tech, huge trend but I think something’s not right. The stock will do 100% in a day, then drop 40% the next. Shenanigans here.”
We’ve been baffled by management since. A huge announcement, the stock rises by 100% (and then some) and then they do a capital raise at a price at a huge discount to the price before the announcement. Not a lot of it makes sense. They sign contracts, then do ridiculous capital raises, diluting holders and never really getting ahead.
And now with a wild 1-for-150 stock split, the chances we ever recoup the loss here is next to none. We just have to reconcile here that we were very wrong under the assumption the tech would outweigh the management. Even with great technology and promise, if the company is poorly run, then it can quite literally be run into the ground.
Action to take: sell Cyngn (NASDAQ:CYN).
HydrogenOne Capital Growth (LSE:HGEN)
Another that has disappointed. HydrogenOne Capital Growth does hold investments in several promising hydrogen-focused private companies. However, the ability to extract value from these has proven difficult.
The length of time needed to do so, along with the fact that we’re down around 76%, means the road back to breakeven just doesn’t look likely in the timeframe that’s reasonable. Our plays into the hydrogen market have proven to be ill timed and not profitable at all.
Action to take: sell HydrogenOne Capital Growth (LSE:HGEN).
Sam Volkering
Co-editor, Southbank Growth Advantage
