Income Strategist Locks In Gains, Cuts Three Stocks

Key Moments

Shifting From Buying To Pruning

The equity market is trading at elevated levels, powered by record highs, a powerful technology rally, and intense enthusiasm around artificial intelligence. This backdrop has many investors questioning whether traditional seasonal patterns and risk rules still matter.

Marc Lichtenfeld, Chief Income Strategist at the Oxford Club, is approaching the current environment from the opposite direction. Instead of searching for fresh opportunities to buy, he is concentrating on positions he believes no longer deserve capital.

“Do you want to be right, or do you want to make money?” is the question he uses to frame his approach.

Three stocks have landed on his sell list this May. The timing is not driven by the calendar alone, he argues, but by a combination of weaker fundamentals, technical behavior, and positioning that, in his view, now tilts the risk-reward balance unfavorably.

Seasonal Pattern Supports A More Selective Stance

Since 1945, the S&P 500 has produced average gains of roughly 7% from November through April, versus about 2% from May through October. Those numbers do not signal an automatic downturn, but they describe a period that historically has not rewarded complacency in weaker holdings. The long-standing phrase “sell in May and go away” has statistical support behind it.

Lichtenfeld is not forecasting a broad market breakdown. He acknowledges that prices are firm and expects that strength could persist. His focus, instead, is on taking advantage of buoyant conditions to exit holdings that, by his assessment, are not pulling their weight in a portfolio.

DexCom: Bullish Consensus Meets Prolonged Price Weakness

DexCom has not simply paused or corrected in his view – it has been in decline for five years. Despite that, analyst enthusiasm remains elevated. Out of 24 Wall Street analysts, 20 carry Buy ratings, and only about 4% of the float is sold short, signaling limited bearish conviction.

Lichtenfeld interprets that imbalance in sentiment as a warning sign. The company operates in the continuous glucose monitoring space, a segment that continues to grow. Yet he sees DexCom’s hold on that expansion as less secure than in the past.

Abbott Laboratories and its FreeStyle Libre system have been winning share, and DexCom has dealt with operational scrutiny, including an FDA warning letter dated March 4, 2025, stemming from inspections in 2024. At the same time, GLP-1 therapies are altering the diabetes treatment landscape and could influence how intensively certain patients monitor glucose over time.

Revenue is still moving higher, but the rate of growth has moderated. For a stock that historically has been rewarded when its trajectory is clearly accelerating, that combination is uncomfortable.

Drawing on his experience as a former sell-side analyst, Lichtenfeld points to factors such as career incentives, herd behavior, and investment banking ties that can keep ratings skewed toward Buys. When he sees consensus pushing toward extremes, he tends to take the opposite side.

Colgate-Palmolive: Limited Growth, Premium Valuation

Lichtenfeld does not view Colgate-Palmolive as a broken story. Instead, he characterizes it as a large-cap name struggling to offer compelling upside. The company has a market capitalization of $69 billion, pays a 2.5% dividend yield, and has delivered essentially flat performance over the past two years, with no obvious catalyst visible.

He sees the investment debate as straightforward. Brand loyalty for core offerings such as Colgate toothpaste is strong, but not every product in the portfolio has that same pricing power. Items like Ajax cleaner and Palmolive dish soap compete in segments with low switching costs. With grocery costs elevated, consumers are examining individual purchases more closely, and private-label or generic products become increasingly attractive alternatives.

That dynamic can complicate the stock’s reputation as a defensive holding. If households trade down in categories where loyalty is weaker, the bullish case on the shares becomes more difficult to support at the margin. Lichtenfeld also notes that insider selling has increased this year, with no offsetting insider purchases. Meanwhile, at roughly 23x earnings and only low-to-mid single-digit growth, he sees little valuation buffer if results simply come in “fine.”

For investors seeking relative defense, Lichtenfeld points elsewhere. He highlights Black Hills Corporation, a utility with data center exposure in Wyoming, as offering a higher yield and what he views as a more credible AI-linked growth angle. More broadly, he points to selected healthcare and REIT opportunities as providing more predictable cash-flow visibility. In his assessment, Colgate-Palmolive does not currently offer the same mix of income support and clarity.

Oracle: Exposed To AI Enthusiasm And Heavy Commitments

Oracle has staged a strong rebound from its lows, and current price momentum appears convincing. Even so, Lichtenfeld views it as one of the more precarious expressions of the AI theme and a candidate to symbolize the downside if that narrative eventually unwinds.

His central concern is the financial structure. Oracle has outlined around $250 billion in additional lease obligations, largely associated with data center and cloud capacity. These commitments do not affect the balance sheet in the same manner as traditional debt until they commence, but they still represent sizable future obligations.

Projections call for free cash flow to be negative $25 billion this year, negative $26 billion next year, and roughly negative $100 billion by 2030. Against that, the company holds $39 billion in cash and carries $125 billion in existing debt, which Lichtenfeld characterizes as a tight equation.

To cover the gap, he expects Oracle will need to tap capital markets, either issuing stock and diluting existing shareholders or taking on additional borrowing at yields that reflect its already leveraged position.

The broader strategic risk centers on the scale of its OpenAI and Stargate partnership, which has been described as exceeding $300 billion over the coming five years and tied to extensive data center and compute expansion. The economics of this program rely heavily on that magnitude of investment. However, OpenAI’s CFO has reportedly raised internal questions about the company’s ability to grow fast enough to keep pace with the planned spending.

If demand or growth expectations fall short, Oracle could be left with significant capacity and funding obligations that are more difficult to manage.

By comparison, Meta Platforms, Amazon, Alphabet, and Microsoft have been mentioned as collectively planning AI-related outlays around $700 billion, but with substantially larger cash-flow cushions to handle volatility. Oracle does not share that same degree of financial flexibility in Lichtenfeld’s view.

Selective Selling Rather Than Broad Bearishness

Lichtenfeld is not arguing that investors should abandon equities entirely. Instead, he believes the current market environment favors selectivity and discipline. In his view, periods of strong market momentum can create opportunities to exit positions where optimism has become disconnected from underlying fundamentals.

He also emphasizes that elevated valuations and concentrated enthusiasm around AI-related themes increase the importance of balance-sheet strength and reliable cash flow. Companies with weaker financial flexibility may face sharper downside risks if market sentiment changes.

For DexCom, he sees excessive bullish sentiment despite slowing momentum and rising competition. For Colgate-Palmolive, he questions whether modest growth justifies its premium valuation. Meanwhile, Oracle’s large future obligations and aggressive AI spending create concerns about long-term financing pressure.

While the broader market may continue advancing, Lichtenfeld argues that investors do not need to hold every stock through every cycle. Instead, he prefers to lock in gains, reduce exposure where risks are rising, and reposition capital toward areas with stronger fundamentals and more attractive income potential.