Published on 2 May 2022 on Zacks via Yahoo Finance

Refresh Your Portfolio by Dumping These 5 Toxic Stocks

To get rid of fundamentally weak toxic stocks is just as important as it is to invest in fundamentally strong companies. Toxic companies are usually characterized by huge debt loads and are vulnerable to external shocks. If you want to protect your portfolio health, make sure to identify such toxic stocks and dump them right away.

GoodRx Holdings Inc. GDRX, Insulet Corporation PODD, Vonage Holdings Corp VG, AppLovin Corporation APP and Embraer S.A. ERJ are a few such toxic stocks.

There are always some stocks that illusively scale lofty heights in a given time period. Yet, the good show doesn’t last for these overblown toxic stocks, as their current price is not justified by their fundamental strength. 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.