For Immediate Release
Chicago, IL – May 27, 2020 – Stocks in this week’s article are Myriad Genetics, Inc. (MYGN - Free Report) , Cinemark Holdings Inc. (CNK - Free Report) , Vericel Corp. (VCEL - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) .
Dump These 4 Toxic Stocks or Sell Short for Timely Profits
Investors who can precisely identify overpriced stocks are likely to emerge winners. In practice, the correctly priced stocks and the overblown toxic stocks are mingled in the market place in such a way that it becomes tough to identify them. Investors who can figure out the overpriced stocks and shun them at the right time are the ones who are likely to benefit.
Generally, toxic stocks are vulnerable to external shocks and burdened with huge debts. In fact, the unreasonably high price of the toxic stocks is short lived as the current price of these stocks is higher than their intrinsic price. So, quite obviously, if you own such toxic stocks for a very long period of time, you are sure to see huge loss in your wealth.
High price of the toxic stocks can be ascribed to an irrational exuberance associated with them or some serious fundamental lacunae. Presence of such stocks in your portfolio may result in the loss of wealth.
However, if you can precisely spot the 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 owning stocks with growth potential, identifying toxic stocks and discarding them at the right time is the key to guard 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/944909/dump-these-4-toxic-stocks-or-sell-short-for-timely-profits
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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