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Image: Bigstock featured highlights include: Vail, Las Vegas Sands, BioMarin and Allegiant

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For Immediate Release

Chicago, IL – September 25, 2020 - Stocks in this week’s article are Vail Resorts, Inc. (MTN - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) , BioMarin Pharmaceutical Inc. (BMRN - Free Report) and Allegiant Travel (ALGT - Free Report) .

Stay Away from These 4 Toxic Stocks to Avoid Losses

Investors who can precisely differentiate between overpriced stocks and fairly priced stocks emerge winners. However, in this complicated marketplace, these two types of stocks are intertwined in such a way that it is very tough to identify them. Investors who can pick the toxic stocks appropriately and abandon them at the right time are likely to benefit.

Generally, the overblown toxic stocks are susceptible to outside shocks and are loaded with high levels of debts. Also, prices of the toxic stocks are unrealistically high. The irrationally inflated price of the toxic stocks is only short-lived in nature as their intrinsic value falls short of the current hyped price.

The overhyped price of toxic stocks can be attributed to either an irrational exuberance associated with them or some fundamental drawbacks related to the stock. Owning such stocks for a long period of time is detrimental and may result in huge erosion of wealth.

Investors may gain from the accurate identification of toxic stocks with the help of 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, figuring out toxic stocks and discarding them at the right time is the key to protect your portfolio from big losses. Profits can be made 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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Strong Stocks that Should Be in the News

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