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Zacks.com featured highlights include Emergent Biosolutions, Western Digital, Thoughtworks Holding and DASAN Zhone Solutions.
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For Immediate Release
Chicago, IL – December 1, 2022 – Stocks in this week’s article are Emergent Biosolutions (EBS - Free Report) , Western Digital Corp. (WDC - Free Report) , Thoughtworks Holding Inc. (TWKS - Free Report) and DASAN Zhone Solutions, Inc (DZSI - Free Report) .
4 Toxic Stocks Hazardous Moreso Amid Volatile Times
The U.S. equity markets have witnessed extreme volatility this year amid the Fed's hawkish stance, the Russia-Ukraine war and inflationary concerns. With the fourth successive 75 basis point increase early this month, the Fed has vowed to continue its aggressive rate hike policy to curb high inflation.
Amid exacerbated supply chain issues, stubborn inflation and aggressive rate hikes, worries of an economic slowdown may induce further bouts of volatility. At this critical juncture, 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. This is because 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, 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. Emergent Biosolutions, Western Digital Corp., Thoughtworks Holding Inc. and DASAN Zhone Solutions, Inc are a few such toxic stocks.
Here are four of the 23 toxic stocks that showed up on the screen:
Emergent Biosolutions: Headquartered in Gaithersburg, Emergent BioSolutions is a global specialty biopharmaceutical company that aims to offer specialized products to healthcare providers and governments to fulfil unmet medical needs and combat emerging public health threats.
The Zacks Consensus Estimate for EBS' 2022 earnings per share implies a year-over-year decline of 149%. The consensus mark for the 2022 bottom line has deteriorated from a loss of 55 cents a share to $2.96 over the past 30 days. Emergent missed earnings estimates in three out of the last four quarters and topped in the other, with the average negative surprise being 565.6%. The company carries a Zacks Rank #4 (Sell) and has a VGM Score of D.
Western Digital: Headquartered in San Jose, CA, Western Digital designs, develops, manufactures and markets a broad range of HDDs used in desktop PCs, servers, network-attached storage devices, video game consoles, digital video recorders and a host of other consumer electronic devices.
The Zacks Consensus Estimate for WDC's fiscal 2023 sales and earnings per share implies a year-over-year decline of 29% and 102%, respectively. The consensus mark for 2022 bottom line has deteriorated from earnings of $1.93 a share to 9 cents over the past 60 days. Western Digital missed earnings estimates in one out of the last four quarters and topped thrice, with the average negative surprise being 3.1%. The company carries a Zacks Rank #4 and has a VGM Score of C.
Thoughtworks: Based in Chicago, Thoughtworks is a technology consultancy company, which integrates strategy, design and engineering to drive digital innovation.
The Zacks Consensus Estimate for TWKS' 2022 earnings per share implies a year-over-year decline of 6.5%. The consensus mark for 2022 EPS has moved south by 5 cents to 43 cents a share over the past 30 days. Thoughtworks missed earnings estimates in one out of the last four quarters, met twice and topped in the other, with the average negative surprise being 4.7%. The company carries a Zacks Rank #4 and has a Value Score of D.
DASAN Zhone: Based in Plano, TX, DASAN offers network access solutions and communications platforms for service providers and enterprise networks in the United States, Canada, Latin America, Europe, the Middle East, Africa, Korea, and other Asia Pacific 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 30 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 and has a VGM Score of D.
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.
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.
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 >>.
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.
Zacks.com 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. www.zacks.com/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 https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include Emergent Biosolutions, Western Digital, Thoughtworks Holding and DASAN Zhone Solutions.
For Immediate Release
Chicago, IL – December 1, 2022 – Stocks in this week’s article are Emergent Biosolutions (EBS - Free Report) , Western Digital Corp. (WDC - Free Report) , Thoughtworks Holding Inc. (TWKS - Free Report) and DASAN Zhone Solutions, Inc (DZSI - Free Report) .
4 Toxic Stocks Hazardous Moreso Amid Volatile Times
The U.S. equity markets have witnessed extreme volatility this year amid the Fed's hawkish stance, the Russia-Ukraine war and inflationary concerns. With the fourth successive 75 basis point increase early this month, the Fed has vowed to continue its aggressive rate hike policy to curb high inflation.
Amid exacerbated supply chain issues, stubborn inflation and aggressive rate hikes, worries of an economic slowdown may induce further bouts of volatility. At this critical juncture, 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. This is because 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, 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. Emergent Biosolutions, Western Digital Corp., Thoughtworks Holding Inc. and DASAN Zhone Solutions, Inc are a few such toxic stocks.
Here are four of the 23 toxic stocks that showed up on the screen:
Emergent Biosolutions: Headquartered in Gaithersburg, Emergent BioSolutions is a global specialty biopharmaceutical company that aims to offer specialized products to healthcare providers and governments to fulfil unmet medical needs and combat emerging public health threats.
The Zacks Consensus Estimate for EBS' 2022 earnings per share implies a year-over-year decline of 149%. The consensus mark for the 2022 bottom line has deteriorated from a loss of 55 cents a share to $2.96 over the past 30 days. Emergent missed earnings estimates in three out of the last four quarters and topped in the other, with the average negative surprise being 565.6%. The company carries a Zacks Rank #4 (Sell) and has a VGM Score of D.
Western Digital: Headquartered in San Jose, CA, Western Digital designs, develops, manufactures and markets a broad range of HDDs used in desktop PCs, servers, network-attached storage devices, video game consoles, digital video recorders and a host of other consumer electronic devices.
The Zacks Consensus Estimate for WDC's fiscal 2023 sales and earnings per share implies a year-over-year decline of 29% and 102%, respectively. The consensus mark for 2022 bottom line has deteriorated from earnings of $1.93 a share to 9 cents over the past 60 days. Western Digital missed earnings estimates in one out of the last four quarters and topped thrice, with the average negative surprise being 3.1%. The company carries a Zacks Rank #4 and has a VGM Score of C.
Thoughtworks: Based in Chicago, Thoughtworks is a technology consultancy company, which integrates strategy, design and engineering to drive digital innovation.
The Zacks Consensus Estimate for TWKS' 2022 earnings per share implies a year-over-year decline of 6.5%. The consensus mark for 2022 EPS has moved south by 5 cents to 43 cents a share over the past 30 days. Thoughtworks missed earnings estimates in one out of the last four quarters, met twice and topped in the other, with the average negative surprise being 4.7%. The company carries a Zacks Rank #4 and has a Value Score of D.
DASAN Zhone: Based in Plano, TX, DASAN offers network access solutions and communications platforms for service providers and enterprise networks in the United States, Canada, Latin America, Europe, the Middle East, Africa, Korea, and other Asia Pacific 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 30 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 and has a VGM Score of D.
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 Zacks.com at: https://www.zacks.com/stock/news/2023521/4-toxic-stocks-more-so-hazardous-amid-volatile-times
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.
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 >>.
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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
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com 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. www.zacks.com/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 https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.