We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Sell These 4 Toxic Stocks to Prevent Portfolio Losses
Being able to identify and discard toxic stocks at the right time is what separates a good investor from a bad one. The stock market specialists know the traits of toxic stocks, which usually go unnoticed by a large number of investors, and therefore are able to avoid humongous losses.
To bridge this knowledge gap, let's try to understand some of the basic characteristics of toxic stocks. Stocks that continue to lose value even when the overall market shows an upside can be identified as toxic stocks. In order to be sure if the stock is toxic or not, an investor needs to dive deeper into a company's financials.
Financial statements are unarguably the best reflection of a company's performance. If the company has high debt on its balance sheet and does not generate enough operating cash to meet its financial liabilities, then it can be identified as a distressed company. Investors should consider eliminating such stock/s from their portfolio.
Keeping a track of the company's latest strategies and deals is another way to identify a distressed firm and hence a toxic stock. Companies that face lawsuits or regulatory issues are typically not considered as good investments by experts.
The risk of owning toxic stocks can also be avoided through diversification. Ideally, a well-diversified portfolio contains stocks from different industries and sectors. In such cases, if one stock loses its value, an upside in other stocks neutralizes the effects and the overall value of the portfolio remains less to unaffected.
The basic understanding of toxic stocks can help investors avoid huge losses and derive maximum benefit from their portfolios. Short selling remains one of the most preferable ways to benefit from the downside associated with toxic stocks.
Dutch Bros Inc., Chegg, Inc., Impinj, Inc. and AngioDynamics, Inc. are a few toxic stocks that you should dump from your portfolio.
Here are four of the 23 toxic stocks that showed up on the screen:
Dutch Bros is an operator and franchisor of drive-thru shops, which focus on serving high-quality, hand-crafted beverages with unparalleled speed and superior services. The Zacks Consensus Estimate for BROS' 2023 bottom line is pegged at a profit of 9 cents per share. The consensus mark has moved south from earnings of 10 cents per share to earnings of 9 cents per share over the past seven days. Dutch Bros missed earnings estimates in two out of the last four quarters and beat twice, with the average negative surprise being 16.07%. The company carries a Zacks Rank #4 (Sell) and has a VGM Score of D.
Chegg provides a social education platform. The Zacks Consensus Estimate for CHGG's 2023 bottom line is pegged at earnings of 28 cents per share, implying a year-over-year deterioration of 24.32%. The consensus mark has moved south from earnings of 34 cents per share 30 days ago. CHGG beat earnings estimates in each of the four trailing quarters, with the average surprise being 17.13%. The company carries a Zacks Rank #4 and has a VGM Score of C.
Impinj provides referral and information network radio frequency identification solutions to the retail, pharmaceutical, healthcare, food and beverage and other industries. The Zacks Consensus Estimate for PI's 2023 bottom line is pegged at a profit of 31 cents per share. The Zacks Consensus Estimate for the firm's 2023 earnings has moved south from 39 cents 30 days ago. Impinj beat earnings estimates in two out of the four trailing quarters and missed in two, with the average surprise being 181.86%. The company carries a Zacks Rank #4 and has a VGM Score of F.
AngioDynamics designs, manufactures and sells a wide range of medical, surgical and diagnostic devices. The Zacks Consensus Estimate for ANGO's 2023 bottom line is pegged at a profit of 3 cents per share. The Zacks Consensus Estimate for the firm's 2023 bottom line has moved south from earnings of 6 cents per share 60 days ago. AngioDynamics beat earnings estimates in two out of the four trailing quarters and missed in two, with the average surprise being negative 50%. The company carries a Zacks Rank #5 (Strong 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.
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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Zacks.com featured highlights include Dutch Bros, Chegg, Impinj and AngioDynamics
For Immediate Release
Chicago, IL – May 16, 2023 – Stocks in this week’s article are Dutch Bros Inc. (BROS - Free Report) , Chegg, Inc. (CHGG - Free Report) , Impinj, Inc. (PI - Free Report) and AngioDynamics, Inc. (ANGO - Free Report) .
Sell These 4 Toxic Stocks to Prevent Portfolio Losses
Being able to identify and discard toxic stocks at the right time is what separates a good investor from a bad one. The stock market specialists know the traits of toxic stocks, which usually go unnoticed by a large number of investors, and therefore are able to avoid humongous losses.
To bridge this knowledge gap, let's try to understand some of the basic characteristics of toxic stocks. Stocks that continue to lose value even when the overall market shows an upside can be identified as toxic stocks. In order to be sure if the stock is toxic or not, an investor needs to dive deeper into a company's financials.
Financial statements are unarguably the best reflection of a company's performance. If the company has high debt on its balance sheet and does not generate enough operating cash to meet its financial liabilities, then it can be identified as a distressed company. Investors should consider eliminating such stock/s from their portfolio.
Keeping a track of the company's latest strategies and deals is another way to identify a distressed firm and hence a toxic stock. Companies that face lawsuits or regulatory issues are typically not considered as good investments by experts.
The risk of owning toxic stocks can also be avoided through diversification. Ideally, a well-diversified portfolio contains stocks from different industries and sectors. In such cases, if one stock loses its value, an upside in other stocks neutralizes the effects and the overall value of the portfolio remains less to unaffected.
The basic understanding of toxic stocks can help investors avoid huge losses and derive maximum benefit from their portfolios. Short selling remains one of the most preferable ways to benefit from the downside associated with toxic stocks.
Dutch Bros Inc., Chegg, Inc., Impinj, Inc. and AngioDynamics, Inc. are a few toxic stocks that you should dump from your portfolio.
Here are four of the 23 toxic stocks that showed up on the screen:
Dutch Bros is an operator and franchisor of drive-thru shops, which focus on serving high-quality, hand-crafted beverages with unparalleled speed and superior services. The Zacks Consensus Estimate for BROS' 2023 bottom line is pegged at a profit of 9 cents per share. The consensus mark has moved south from earnings of 10 cents per share to earnings of 9 cents per share over the past seven days. Dutch Bros missed earnings estimates in two out of the last four quarters and beat twice, with the average negative surprise being 16.07%. The company carries a Zacks Rank #4 (Sell) and has a VGM Score of D.
Chegg provides a social education platform. The Zacks Consensus Estimate for CHGG's 2023 bottom line is pegged at earnings of 28 cents per share, implying a year-over-year deterioration of 24.32%. The consensus mark has moved south from earnings of 34 cents per share 30 days ago. CHGG beat earnings estimates in each of the four trailing quarters, with the average surprise being 17.13%. The company carries a Zacks Rank #4 and has a VGM Score of C.
Impinj provides referral and information network radio frequency identification solutions to the retail, pharmaceutical, healthcare, food and beverage and other industries. The Zacks Consensus Estimate for PI's 2023 bottom line is pegged at a profit of 31 cents per share. The Zacks Consensus Estimate for the firm's 2023 earnings has moved south from 39 cents 30 days ago. Impinj beat earnings estimates in two out of the four trailing quarters and missed in two, with the average surprise being 181.86%. The company carries a Zacks Rank #4 and has a VGM Score of F.
AngioDynamics designs, manufactures and sells a wide range of medical, surgical and diagnostic devices. The Zacks Consensus Estimate for ANGO's 2023 bottom line is pegged at a profit of 3 cents per share. The Zacks Consensus Estimate for the firm's 2023 bottom line has moved south from earnings of 6 cents per share 60 days ago. AngioDynamics beat earnings estimates in two out of the four trailing quarters and missed in two, with the average surprise being negative 50%. The company carries a Zacks Rank #5 (Strong 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 Zacks.com at: https://www.zacks.com/stock/news/2095170/sell-these-4-toxic-stocks-to-prevent-portfolio-losses
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 >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
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.