Why I'd sell Tesco plc, 88 Energy Ltd and Royal Bank of Scotland Group plc

Today I am looking at three stocks that I believe investors should keep on selling.

Leave it on ice

A stream of drilling data from fossil fuel explorer 88 Energy(LSE: 88E) has seen the company' share price oscillate wildly since the start of February.

88 Energy set hearts fluttering after testing work at its Alaskan Icewine asset revealed that the project had "world class resource prize potential." Since then the independent resource estimate for the HRZ shale formation has been hiked to 1.4bn barrels, while the probability of geological success has risen to 60% from 40% previously.

On top of this, 88 Energy has now raised A$25m through an oversubscribed share placing to get development work at Icewine motoring.

Wild share price movements are part-and-parcel of investing in fledgling metals and energy explorers, where a 'positive' or 'disappointing' operational update can have huge ramifications on investor appetite. And of course 88 Energy has a long road in front of it before maiden oil is struck in Alaska, a journey that could see the stock price continue to fluctuate madly.

With the broader market also wrestling with a worrying supply/demand outlook, I reckon 88 Energy carries far too much for savvy investors.

Banking battles

While Royal Bank of Scotland(LSE: RBS) may have bounced from April's multi-year lows around 200p per share, I reckon the stock remains in peril of moving south yet again.

The growth story over at RBS has been significantly dented by an aggressive programme of asset shedding in recent years, a factor that sent revenues sinking 13% during January-March to £3.06bn. And the bank's earnings credentials are likely to come under further scrutiny should Britain tumble out of the European Union at next month's referendum.

And of course RBS faces a further build in PPI-related penalties in the months ahead, as the FCA's proposed 2018 claims deadline potentially looms into view.

The City expects RBS to chalk up an 8% earnings decline in 2016 alone, resulting in a P/E rating of 12.6 times. This number is far from terrible, by any means. But given the bank's elevated risk profile, I reckon this reading is still far too high, particularly when stacked up against the earnings multiples of many of its industry rivals.

Trolley troubles

As if Tesco(LSE: TSCO) didn't have enough problems in trying to fight off the impact of discounters Aldi and Lidl, online retail giant Amazon(NASDAQ: AMZN) is about to make things a lot more difficult for the Cheshunt-based business.

Amazon -- which inked an accord with Morrisons earlier in February to sell the Bradford chain's goods on its website -- is about to launch dozens of own-branded goods across the grocery and household goods segments, according to recent reports in The Wall Street Journal.

The US giant is clearly going big on its groceries drive, causing a further headache for the likes of Tesco which needs its online channel to keep firing as footfall in its stores slumps.

Given these rising competitive pressures, I reckon Tesco's share price remains too high at present levels. Even if the company manages to meet the City's earnings forecasts of 6.8p per share for the year to February 2017, this still leaves Tesco dealing on an elevated P/E multiple of 24.1 times.

I reckon the increasing fragmentation affecting the UK grocery sector makes Tesco a risk too far at these prices.

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Royston Wild has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended Amazon.com. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.