The right stocks can make you rich and change your life.
The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.
They’re pure portfolio poison.
Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.
That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.
I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.
But first, if you own any or all of these “toxic stocks,” sell them today…
AIG (NYSE: AIG) – Sentiment Weakens Amid Analyst Downgrades
AIG is showing signs of losing steam despite a 14% year-to-date increase. Recent analyst actions suggest caution ahead of the company’s third-quarter earnings report on Monday. Over the past three months, analysts have slashed AIG’s earnings estimates by nearly 30%, with a roughly 24% reduction over six months—indicating a shift in confidence.
BMO Capital’s Michael Zaremski downgraded AIG to “Market Perform” from “Outperform” in October, noting that AIG has underperformed its peers and could face additional headwinds. Zaremski cited concerns about the company’s new operating structure and potential for M&A, which could keep investor sentiment muted. With these challenges on the horizon, AIG may struggle to keep up with its sector counterparts in the near term.
Target (NYSE: TGT) Retailer Facing Potential Tariff Headwinds
As the possibility of Donald Trump’s return to the White House gains traction, retailers could face a major challenge with the reintroduction of tariffs. Trump has proposed a 20% tariff on all imported goods and a staggering 60% tariff on imports from China, which would squeeze margins and potentially reduce sales for companies reliant on international supply chains.
Target (NYSE: TGT) stands out as particularly vulnerable. While it’s managed a modest 6% gain this year, it’s still underperforming the broader market, and the company’s reliance on imported goods could become a liability if tariffs rise. Wells Fargo analysts have flagged Target as one of the names to watch, noting that higher import costs could further pressure earnings. While Wall Street holds an overall optimistic view with an expected 18% upside, we’re cautious given the external risks that could derail that growth.
Given the uncertainty surrounding trade policy and the potential for increased costs, TGT might not be worth holding onto right now. Consider reducing exposure to this stock in the near term.
Meta Platforms (NASDAQ: META) – Rising Costs Damp Investor Sentiment
Meta posted solid third-quarter results, with revenue up 19% year-over-year to $40.59 billion and EPS of $6.03, both beating analyst expectations. However, despite the strong numbers, investor enthusiasm took a hit after the company announced that capital expenditures would climb further in 2025, with projected spending now up to $40 billion for the year.
CEO Mark Zuckerberg emphasized that AI advancements are at the center of Meta’s growth strategy, fueling engagement and new advertising capabilities. While this focus on AI holds promise, the steep rise in spending has investors on edge. CFO Susan Li’s comments about “significant capital expenditures growth” added to concerns, leading to a cautious outlook.
For now, Meta’s spending ramp-up appears to be spooking the market more than boosting confidence. If costs continue to escalate, it may weigh on Meta’s performance despite strong user metrics.
