With the “sell in May and go away” rule of thumb on my mind and, no doubt, on the minds of other subscribers to our Switzer Report, if you want to sell something, I’ve decided what should be on the short list. I approach this piece with no pre-conceived ideas but am happy to be guided by what the analysts are collectively thinking.

Of course, selling poor performers can be a risk, as Megaport (MP1) showed on the Friday before last, rising 41%. Even with that rise, many of us could be out of pocket, considering it was over $21 in November 2021. What happened then? Well, there was a big tech company sell-off, which took MP1 down 75%. But it’s not alone. Xero (XRO) is off 40% since November 2021 and the great Atlassian has lost 70% since its all-time high, while Tesla has given up 63% of its value in, you guessed it, November 2021.

This I why I think when interest rates stop rising (and, maybe, are cut), many tech stocks will start recovering some of their old share prices, but they won’t recover all their previous gains for some time.

By the way, the experts surveyed by FNArena still like MP1 so I’ll stick with this outfit. The consensus says 72% upside but Ord Minnett sees a 144% rise as a possibility and six out of six analysts love the stock.

While on a good tech stock like Xero, the consensus says 0.6% upside and UBS sees an 18% rise ahead. Two analysts see falls, with Ord Minnett tipping a 41% slide. I like the company and my colleague, Marcus Bogdan, the fund manager for the Switzer Dividend and Growth Fund, recently visited Xero’s headquarters in London and came away with positive vibes and he’s a very cautious kind of guy.

Mesoblast (MSB) has been a pain in the butt and I have regretted believing in this company’s old tale of imminent success. The consensus view is up 106.2% but there’s only one broker, Bell Potter, prepared to investigate this ‘sucker’. Year-to-date, MSB is up 11.49%. I hate the business but I’ll give it to year’s end, though I feel I could be making a mistake with this lot. The only reason I’ll persist with this stock was because it reached a high of $1.33 in February, which was a 118% recovery from its June 2022 low of 61 cents. This one might survive this week’s sell-off but I’ll be doing some more homework by seeking out that Bell Potter analyst.

And what about Zip Co.? Here the consensus gives us hope, with a 63.6% upside predicted but it has been helped by the 304% tip from someone at Shaw and Partners! Ord Minnett sees a 30% rise, Macquarie says a zero rise and two others say 6-10% downside.

If I had a lot of money in Zip, I’d halve it and buy a company with more likelihood of upside. I can see a small upside, maybe from a takeover offer, but I can’t see a 300% gain.

Now to that troubled company EML, which has had more challenges than Indiana Jones in the Temple of Doom! The consensus view is 71.2% upside and there are only two analysts surveyed with UBS seeing a -2% slide but Ord Minnett thinks a 144% rise is possible. I think this is essentially a good business but with hopeless management facing a number of bad luck events. I’m a holder.

Another disappointing business has been Tyro Payments. Here the consensus view is 22% upside and five out of five analysts like the company. Ord Minnett is the most positive with a target price of $2.60, which is 64% above its current share price of $1.58.

Unlike the other stocks above, I hold a decent chunk of Tyro and know the company is worth more than what Potentia Capital offered (around $1.70). Why would they offer $1.70 if they didn’t think the business was worth at least $2 or even $2.50 in a couple of years’ time?

Payments companies have been caught up in the tech sell-off powered by rising interest rates, thanks to central banks. That’s why the Tyro board should say ‘No’ and encourage management to lift its game and be patient.

Many of these stocks that I’ve mentioned have individual issues that partly explain their low price but some of the lower share price is related to the shellacking that growth stocks have copped because of one of the most vicious rate-rising programs we’ve ever seen here and around the world.

It makes me think that when rate rises stop and the price of money starts to fall, we will see a lot of now-rejected companies gain a whole pile of friends. If you know a company with 20% or more upside, I’d sell many of the stocks above and buy that. But if you can’t, these current losers might be worth hanging on to until we see what happens when rates start to fall, later this year.

One final stock that might have hit your portfolio that I’ll look at (with some help from my analyst friends) is Magellan Financial Group (MFG). This was over $65 in February 2020. By November 2021, it was around $31. Its problems started before tech companies were smashed but it does hold a lot of stocks that have been caught up in the tech wreck of 2022. The fund managers also had Beijing as a pest as it picked on its best entrepreneurs, like Jack Ma and Alibaba.

Here are the big names MFG has invested in:

The company has also had personal problems but I think the team in charge now could surprise those who think the company is on a path of capital destruction forever. So, what do the analysts say? The consensus sees 9% upside. Here are the individual views:

MFG’s current share price is $8.33. The target consensus price is $9.12. I think Ord Minnett’s $11.50 isn’t a stretch and while I don’t have strong convictions, I think this could be in dollar cost-average territory for those who went into this stock in the teens. If you bought in the twenties, I think you’ll have a long wait to get out of the red.

As you can see, I’m not in a dumping mood because I think the eventual tech-stock rebound will help many of these losers. In fact, I look at May differently because I think a comeback of stocks is out there waiting to happen later in 2023 and rolling into 2024.

My investing this year will be more: “Buy in May and stay!”

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances