Back to top

Image: Shutterstock featured highlights include Icahn Enterprises, Vestas Wind Systems, MGM Resorts International and DASAN Zhone Solutions

Read MoreHide Full Article

For Immediate Release

Chicago, IL – December 19, 2022 – Stocks in this week’s article are Icahn Enterprises (IEP - Free Report) , Vestas Wind Systems (VWDRY - Free Report) , MGM Resorts International (MGM - Free Report) and DASAN Zhone Solutions, Inc (DZSI - Free Report) .

4 Toxic Stocks That Can Drag Down Your Portfolio Performance

Since the beginning of 2022, markets have been bearing the brunt of macroeconomic and geopolitical uncertainty. Rising interest rates and inflationary concerns are keeping investors on edge. The most important thing during bear markets is avoiding big errors. Regardless of your market approach to investing or trading, there is only one way to protect your portfolio from a large loss. Selling at a small loss before it snowballs into a large loss is the only way to ensure that a devastating drawdown does not occur within the context of a portfolio.

Considering the current market mood filled with ambiguity, it's as important to get rid of fundamentally weak toxic stocks as it is to invest in attractively valued companies possessing fundamental strength.

Toxic companies are usually characterized by huge debt loads and are vulnerable to external shocks. These stocks might illusively scale lofty heights in a given time period, but the good show doesn't last for these overblown toxic stocks, as their current price is not justified by their fundamental strength. Accurately identifying such bloated stocks and getting rid of them at the right time can protect your portfolio.

Overpricing of these toxic stocks can be attributed to either an irrational enthusiasm 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.

Nonetheless, if you can precisely spot such toxic stocks, you may gain by resorting to an investing strategy called short selling. This strategy allows one 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 offloading them at the right time is crucial to guard one's portfolio against big losses or make profits by short selling them. Icahn EnterprisesVestas Wind SystemsMGM Resorts International and DASAN Zhone Solutions, Inc are a few such toxic stocks.  

Here are four of the 19 toxic stocks that showed up on the screen:

Icahn Enterprises is a diversified holding company engaged in various businesses, including investment management, metals, real estate and home fashion. The Zacks Consensus Estimate for the firm's 2022 earnings per share has declined 63% to 38 cents over the past 60 days. IEP missed earnings estimates in three out of the last four quarters and topped in the other, with the average negative surprise being 415.4%. The company carries a Zacks Rank #5 (Strong Sell) and has a Value Score of D.

Vestas Wind is engaged in the development, manufacture, sale and maintenance of wind technology that uses the energy of the wind to generate electricity. The Zacks Consensus Estimate for the company's 2022 loss per share has widened by 3 cents to 27 cents over the past 30 days. The bottom line implies a year-over-year deterioration of 485.7%. The consensus mark for Vestas Wind's 2022 revenues also signals a year-over-year decline of 18.3%. The company carries a Zacks Rank #5 and has a VGM Score of D.

MGM Resorts is a holding company and primarily owns and operates casino resorts through wholly owned subsidiaries. The Zacks Consensus Estimate for the company's 2022 earnings per share has declined 71.4% to $1.29 over the past 60 days. MGM's 2023 bottom-line estimates imply a decline of 81.2% year over year. MGM Resorts missed earnings estimates in two out of the last four quarters for as many beats, with the average negative surprise being 52%. The company carries a Zacks Rank #4 and has a VGM Score of D.

DASAN Zhone offers network access solutions and communications platforms for service providers and enterprise networks in the United States, Canada and many other countries. The Zacks Consensus Estimate for DZSI's 2022 earnings per share implies a year-over-year decline of 33.3%. The consensus mark for 2022 EPS has moved south by 13 cents a share to 18 cents over the past 60 days. DZSI missed earnings estimates in three out of the last four quarters and topped in the other, with the average negative surprise being 15.1%. The company carries a Zacks Rank #4 (Sell) and has a VGM Score of F.

Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

For the rest of this Screen of the Week article please visit at:

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 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.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

Follow us on Twitter:

Join us on Facebook:

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Contact: Jim Giaquinto


Phone: 312-265-9268


Visit: provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit information about the performance numbers displayed in this press release.

Published in