I'm up 31% in 2024, but I wouldn't touch this S&P company with a boat pole!

As a naive investor, I always look for companies that can deliver long-term value. But sometimes, even those that rise may be left alone. Case in point: Trump Media & Technology (NASDAQ: DJT ), which has rallied 31% since the start of 2024. Despite these impressive gains, I wouldn't approach this company with a bargepole. Here is the reason.

Limited power

First, let's talk about what the company actually does. It works Social Realitya social media platform launched by former US President Donald Trump. Although it gets attention because of its famous founder, the fundamentals of the business are, shall we say, less than stellar.

When you look at the numbers, it's hard not to be blind. In its latest earnings report, the company posted revenue of just $3.43m. That's a million with an 'm', folks. Yet somehow, this company has a market capitalization of over $4bn!

But wait, it gets worse. That small amount came with a net loss of $379m. You read that right – the company loses more than 100 times what it brings in. It's not the kind of math that makes me happy as an investor.

Now, you might be thinking, 'But it's a growth stock! It's all about the future!' Well, about that… The company's revenue is actually down 9.2% over the past year. That's not the kind of direction I like to see in the context of proper growth.

Let's not forget about volatility. With a beta of 5.98, six times as volatile as the market, this firm is about as stable as a house of cards in an earthquake. Stocks have been moving wildly, which may be fun for day traders, but it's enough to give long-term investors like me a serious case of vertigo.

There is also a small matter of inside sales. Recently, the company had to buy back shares from management to pay a large tax bill. While details are sketchy (never a good sign), it's clear that some insiders are headed for the exits.

The future

Looking ahead, there are storm clouds on the horizon. The big 'opening' event is coming in September, when a large number of shares will be available for trading. This may cause more selling pressure and may lower the shares.

And let's not forget the wider context. The company has been accused of many, many lawsuits involving the very people who helped bring it to market. It's definitely not a recipe for smooth sailing.

Now, I'm not here to make political judgments. But as an investor, I'm looking for strong businesses with strong fundamentals and clear lines of profit. Trump Media & Technology, despite its headline-grabbing nature, falls short on all of these counts for me.

Not me

So, while the stock may be up 31% this year, I'm going to be very specific. There are plenty of other fish in the sea – with real income, growing user bases, and business models that make sense. As for me, I'll stick to companies that don't make me feel like I need a stiff drink every time I look at the finances.

Remember, Fools, just because stocks are going up doesn't mean it's a good investment. Sometimes, the smartest move is to look away and keep looking.