Currently, commodities are rallying on a weaker dollar and crude oil prices are rising. Also, Fed officials are optimistic about an increase in rates soon. The overall optimism is driving stock prices higher. Notably, the S&P 500 index touched its highest closing level of the year this month.

However, is the tide really shifting or just lulling investors into a fake sense of security?

The dovish comments from the Fed Chairwoman Janet Yellen paled under the dismal jobs data for May. While 2016 may witness a rate hike, chances of it happening in the upcoming June meeting seem remote.

Though the stock market is showing signs of recovery, a slowdown in global demand and subdued consumption in the U.S. cannot be ignored. Also, deep-seated problems in China’s economy will continue to add to global woes.

The S&P 500 index has gained nearly 4% so far this year, but the growth comes after three-straight months of losses in the early part of this year. With top-line growth remaining elusive, as reflected in the first-quarter earnings season, will this gain be sustainable in the future?

In the prevailing uncertain environment, stock selection could be a tricky task. Definitely there are good strategies to pick right stocks, but it’s also important to stay away from the toxic ones.

5 Stocks to Shun

Selecting stocks to dump or stay away from could be a bit tricky. However, with the assistance of our Zacks Stock Screener, one can locate stocks with a red flag.

One could begin by selecting stocks based on the Zacks Industry Rank. The Zacks Industry classification divides the business world into 16 sectors comprising 60 medium or M-level industries and 260 plus or X-level industries. We rank all 260 plus X-level industries based on the earnings outlook for the constituent companies in each industry.

A bottom Zacks Industry Rank indicates that stocks within that group are likely to see downward earnings estimate revisions, implying a bearish outlook for that industry.

Also, under no circumstance should you buy a stock with a Zacks Rank #4 (Sell) or #5 (Strong Sell) coupled with a VGM score of F.

Ohio-based The Andersons, Inc. (ANDE Quick QuoteANDE - Free Report) , together with its subsidiaries, engages in the grain, ethanol, plant nutrient, railcar leasing, turf and cob products, and retailing businesses in the U.S. and internationally. This Zacks Rank #5 stock, which has a VGM Score of ‘F’, is part of the agriculture/products industry holding a Zacks Industry Rank #246 (bottom 7%).

Andersons’ performance continues to be hurt by volatile oil prices, strong competition and adverse weather conditions. Chinese import restrictions also remain a challenge for the company. Higher debt, stringent regulations and pricing pressure from other companies justify its projected EPS negative growth (F1/F0) of 38.6% compared with the industry positive average of 4.8%.

Ares Management, L.P. (ARES Quick QuoteARES - Free Report) , based in California, is a global alternative asset manager. It manages four investment groups that invest in the tradable credit, direct lending, and private equity and real estate markets. This Zacks Rank #5 stock has a VGM Score of ‘F’ and belongs to the financial investment management industry that holds a Zacks Industry Rank #203 (bottom 23%).

The company’s high risk portfolio of middle market debt and equity investments, which increases its potential earnings and assets volatility, led to the nearly 26% downward revision in the 2016 earnings estimate over the last 30 days. Also, the company’s projected EPS negative growth (F1/F0) of 19.4% indicates a risky investment.

Headquartered in Florida, BankUnited, Inc. (BKU Quick QuoteBKU - Free Report) provides various financial products and services to commercial and individual customers in the U.S. through its subsidiaries. This Zacks Rank #4 stock, which holds a VGM Score of ‘F’, is part of the major regional banks industry that holds a Zacks Industry Rank #180 (bottom 32%).

While its price/earnings (F1) ratio of 15.18 when compared with the industry average of 12.70 reflects its overpriced status, BankUnited’s rising expenses, compressed margin and exposure to risky loans validates the nearly 4% downward revision in the 2016 earnings estimate over the last 60 days.

Massachusetts-based TripAdvisor Inc. (TRIP Quick QuoteTRIP - Free Report) is an online travel research company. The company features reviews and advice on hotels, resorts, flights, vacation rentals, vacation packages, travel guides, and lots more. This Zacks Rank #5 stock has a VGM Score of ‘F’ and belongs to the Internet commerce industry that holds a Zacks Industry Rank #226 (bottom 15%).

Rapid growth in mobile traffic has led to lower monetization benefits and huge investments, thus impacting TripAdvisor’s financial results. This has resulted in nearly 16% downward revision in 2016 earnings estimate over the last 60 days. Also, the company’s dependence on a relatively small number of significant advertisers for its revenues along with tough competition substantiate its projected EPS negative growth (F1/F0) of 26.6% compared with the industry positive average of 18.1%.

FS Investment Corporation , based in Philadelphia, is a business development company specializing in investments in debt securities. It seeks to purchase interests in loans through secondary market transactions or directly from the target companies as primary market investments. This Zacks Rank #4 stock, which holds a VGM Score of ‘F’, is part of the financial – SBIC & commercial industry that holds a Zacks Industry Rank #191 (bottom 28%).

Lower investment income and higher energy investments contributed to its projected EPS negative growth (F1/F0) of 17.1%. Also, its projected negative sales growth (F1/F0) of 10.4% indicates no near-term respite.

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