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Image: Bigstock featured highlights include: New Fortress Energy, Match Group, Ryman Hospitality and Welbilt

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For Immediate Release

Chicago, IL – August 7, 2020 – Stocks in this week’s article are New Fortress Energy LLC (NFE - Free Report) , Match Group, Inc. (MTCH - Free Report) , Ryman Hospitality Properties, Inc. (RHP - Free Report) and Welbilt, Inc. (WBT - Free Report) .

4 Toxic Stocks to Discard or Sell Short for Profit

One key factor behind successful investing is the correct identification of overpriced and fairly priced stocks. In practice, overvalued stocks and the correctly priced ones are mingled in such a way that distinguishing them is a tough task for investors. However, investors who can identify the overhyped toxic stocks and discard them at the right time are the ones who stand to benefit.

Usually, toxic companies are vulnerable to external onslaughts and burdened with huge debts. Irrationally high price of the toxic stocks is short lived as their current price exceeds their inherent value and these stocks are bound to result in loss for investors over time.

Higher price of the toxic stocks can be ascribed to either an irrational exuberance associated with them or some serious fundamental drawbacks. If you own such stocks for a long period of time, you are bound to see a significant loss in your wealth.

If you can, however, accurately figure out the toxic stocks, you may gain by resorting to an investing strategy called short selling. This strategy allows you to sell a stock first and then buy it when the price falls.

While short selling excels in bear markets, it typically loses money in bull markets.

So, just like identifying stocks with growth potential, pinpointing toxic stocks and dumping them at the right time is the key to safeguard your portfolio from big losses or make profits by short selling them.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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