The 3 biggest stinkers in my SIPP plunged again this week – what on earth should I do?
My Self-Invested Personal Pension (SIPP) has produced some cracking winners since I started building it three years ago. Costain, Rolls-Royce, and Lloyds are all up roughly 200% on my watch.
But investing isnât all champagne and steaks, thereâs inevitably the odd dollop of thin gruel too. In my case that comes in three stubborn lumps. By sheer coincidence, the three worst performing stocks in my SIPP all published their full-year results either yesterday (25 February) or today, and they all stank. So do I finally pull the plug?
Aston Martin shares are a car crash
James Bond car maker Aston Martin Lagonda (LSE: AML) is the worst of the lot. If this FTSE 250 stock were a movie franchise, it would a total horror show. The shares fell another 12.5% today and are down 93% over five years. Iâm nursing a roughly 70% loss, which almost feels like a win in comparison. Thankfully, I only invested a tiny sum.
Yesterday’s numbers were ugly. Revenue dropped 21% to £1.3bn and net debt climbed to £1.4bn, as weak demand and tariffs bit. Management is cutting more jobs while blaming geopolitical turmoil and macro pressures.
One danger with horror stocks like this is that they always look on the brink of a comeback, only to keep flopping. My stake is now so small it’s hardly worth selling. Iâll hold it for novelty value and as a lesson learned. I wouldnât suggest anyone considers buying it though.
Ocado is a stinky cheese
Ocado (LSE: OCDO) is almost as big a car crash. Itâs down 90% over five years and Iâm sitting on a 47% loss.
The FTSE 250 stock slid 10% on this morning’s results before recovering slightly, after it unveiled plans to slash around 1,000 jobs in a bid to save £150m. Its automated customer fulfilment centre (CFC) rollout has hit setbacks, with key US partner Kroger and Canadaâs Sobeys both pulling back.
There was a glimmer of hope here. Underlying core earnings jumped to £178m and management reckons Ocado will become full-year cash flow positive in 2026/27. That would be a milestone for a business that has burned through money for years.
It still needs more CFC to convince the market and again, I wouldnât buy more or urge anyone else to consider piling in. I may be mad but I’ve been through so much, Iâll stick with it.
Diageo must fight back soon
FTSE 100 spirits giant Diageo (LSE: DGE) is my great recovery hope. The one I really went to town on. And once again itâs disappointed me.
The shares plunged 12.7% yesterday after new chief executive Dave Lewis cut the dividend and lowered guidance following tough US trading. They fell again today and are down 45% over five years.
Iâm worried about the impact of weight loss drugs and changing drinking habits. But Diageo still owns a brilliant portfolio of global brands and generates plenty of cash. When consumers feel richer, I suspect theyâll be thirsty again. I wonât be selling. Iâm even tempted to buy more, but averaging down on Diageo is a habit I need to quit.
So Iâll hold all three. I’m pretty confident about Diageo, still, but the other two are complete punts. Investors hunting for top FTSE stocks probably shouldnât start here.
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- As the Ocado share price drops 9% on FY25 results, should I buy this FTSE 250 stock?
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Harvey Jones has positions in Aston Martin Lagonda Global Plc, Costain Group Plc, Diageo Plc, Lloyds Banking Group Plc, Ocado Group Plc, and Rolls-Royce Plc. The Motley Fool UK has recommended Diageo Plc, Lloyds Banking Group Plc, and Rolls-Royce Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
