For Immediate Release
Chicago, IL – December 15, 2017 - Stocks in this week’s article Incyte Corporation (INCY - Free Report) , AMC Entertainment Holdings, Inc. (AMC - Free Report) , Mercadolibre, Inc. (MELI - Free Report) , PTC Inc. (PTC - Free Report) and Clean Harbors, Inc. (CLH - Free Report) .
Dispose of These 5 Toxic Stocks or Sell Short for Profit
One of the keys to successful investing is precise identification of overhyped toxic stocks and the correctly priced ones. But it is not easy to accurately distinguish between these two types of stocks. Investors who can correctly spot the toxic stocks and get rid of them at the right time are likely to benefit at the end.
Usually, overblown toxic stocks are susceptible to external shocks and are loaded with hefty amount of debts. Also, the price of the toxic stocks is unjustifiably high. The high price of toxic stocks is only short-lived as the current bloated price of the toxic stocks is higher than its intrinsic value.
The exorbitant price of toxic stocks can be due to either an irrational exuberance associated with them or some fundamental drawbacks associated with the stock. Owning such stocks for a long stretch of time can be detrimental to investors 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 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, picking up 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/285928/dispose-of-these-5-toxic-stocks-or-sell-short-for-gains
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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