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Image: Bigstock featured highlights include: Casa Systems, Stoneridge, Shake Shack and Assai Atacadista

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For Immediate Release

Chicago, IL – November 9, 2021 – Stocks in this week’s article are Casa Systems, Inc. (CASA - Free Report) , Stoneridge, Inc. (SRI - Free Report) , Shake Shack, Inc. (SHAK - Free Report) and Sendas Distribuidora S.A. (ASAI - Free Report) .

Discard These 4 Toxic Stocks to Prevent Painful Losses

Investors who can appropriately distinguish between overblown/inflated toxic stocks and the fairly priced stocks see success at the end. But, telling one from the other in such cases is no mean feat. Hence, one should know how to identify toxic stocks and get rid of those at the right time.

Usually, overpriced toxic stocks are vulnerable to external shocks and are burdened with huge debt levels. The price of toxic stocks is unreasonably high. The artificially high price of the toxic stocks is only temporary as the intrinsic value of the same is lower than the current bloated price.

The unrealistically high price of toxic stocks can be due to either an irrational exuberance associated with them or some fundamental drawbacks. Owning such stocks for a long period of time can be detrimental to investors and may result in huge erosion of wealth.

Nonetheless, investors may profit from the precise identification of toxic stocks with the help of an investing strategy known as short selling. This strategy allows them 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, identifying toxic stocks and getting rid of them at the right time is the key to guard 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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