Zacks.com featured highlights: PTC, Capital Senior Living, ZELTIQ Aesthetics, Conns and Medivation

For Immediate Release

Chicago, IL – September 16, 2016 - Stocks in this week's article include: PTC Inc. (PTC), Capital Senior Living Corp. (CSU), ZELTIQ Aesthetics, Inc. (ZLTQ), Conns Inc. (CONN) and Medivation, Inc. ( MDVN).

Screen of the Week of Zacks Investment Research:

5 Toxic Stocks to Offload or Play Short

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

Toxic companies are usually characterized by huge debt loads and are vulnerable to external shocks. 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 of time, you are bound to see massive erosion of wealth.

However, 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 from big losses or make profits by short selling them.

Screening Criteria

Here is a winning strategy that will help you to identify overhyped toxic stocks:

Most recent Debt/Equity Ratio greater than the median industry average: High debt/equity ratio implies high leverage. And high leverage indicates a huge level of repayment that the company has to make in connection with the debt amount.

P/E using 12-month forward EPS estimate greater than 50: A very high forward P/E implies that a stock is highly overvalued.

% Change in F (1) and F (2) Estimate (12 Weeks) less than -5: Negative EPS estimate revision for the current and the next fiscal year during the past 12 weeks point to analysts' pessimism.

Zacks Rank more than or equal to #3: We have not considered Buy-rated stocks that generally outperform the market. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Here are five of the 19 stocks that made it through the screen:

PTC Inc. (PTC) is a Needham, MA-based software company engaged in developing, marketing and supporting software solutions. Over the past one-month period, the current quarter earnings estimate has remained stable at 29 cents. The stock currently has a ZacksRank #4 (Sell).

Capital Senior Living Corp. (CSU), based in Dallas, TX is engaged in providing senior living services in the U.S. Over the last 30 days, its quarterly estimate has remained at a no loss, no gain situation. Capital Senior Living carries a Zacks Rank #3 (Hold).

Pleasanton, CA-based ZELTIQ Aesthetics, Inc. (ZLTQ) is a medical technology company. Over the past 30 days, its current quarter estimate has declined 14.3% to 6 cents per share. The company carries a Zacks Rank #3.

The Woodlands, TX-based Conns Inc. (CONN) is a specialty retailer, which currently operates retail locations in Texas and Louisiana. Over the last 30 days, its current quarter loss estimate has widened from a loss of 6 cents to a loss of 19 cents. Conns carries a Zacks Rank #3.

Medivation, Inc. (MDVN) is a San Francisco, CA-based biopharmaceutical company, which focuses on the development and commercialization of medical therapies to treat serious diseases in the U.S.Over the past one-month period, the current quarter earnings estimate has remained stable at 29 cents. The stock currently has a Zacks Rank #5 (Strong Sell).

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.

Disclosure: Performance information for Zacks' portfolios and strategies are available at: https://www.zacks.com/performance.

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About Screen of the Week

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PTC INC PTC: Free Stock Analysis Report
 
CAPITAL SR LIVG CSU: Free Stock Analysis Report
 
ZELTIQ AESTHETC ZLTQ: Free Stock Analysis Report
 
CONNS INC CONN: Free Stock Analysis Report
 
MEDIVATION INC MDVN: Free Stock Analysis Report
 
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