For Immediate Release
Chicago, IL – January 19, 2021 – Stocks in this week’s article are Carrols Restaurant Group, Inc. (
TAST Quick Quote TAST - Free Report) , Nuance Communications, Inc. ( NUAN Quick Quote NUAN - Free Report) , Hexcel Corporation ( HXL Quick Quote HXL - Free Report) and Melco Resorts & Entertainment Limited ( MLCO Quick Quote MLCO - Free Report) . These 4 Toxic Stocks Could Endanger Your Portfolio
The secret of successful investing lies in the proper identification of overpriced stocks and reasonably priced stocks. In a complex marketplace, overblown stocks and the correctly priced ones are intertwined in such a way that it is not easy to distinguish between them. However, spotting the bloated toxic stocks on a regular basis and abandoning them at the right time is one of the secrets to a winning investment strategy.
Usually, toxic companies are characterized by huge debt burden and are vulnerable to external shocks. Irrationally high price of the toxic stocks is short-lived as their current price is higher than their intrinsic value and these are bound to result in loss for investors over time.
Overpricing of the toxic stocks can be ascribed to either an irrational exuberance surrounding them or some serious fundamental drawbacks. If you own such bubble stocks for an inordinate period of time, you are bound to see massive erosion of wealth.
However, if you are a smart investor and can precisely spot such 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 pinpointing stocks with growth potential, identifying toxic stocks and discarding them at the right time is crucial to shield your portfolio from big losses or make profits by short selling them.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1248055/these-4-toxic-stocks-could-endanger-your-portfolio 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. About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
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Contact: Jim Giaquinto
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