2 Stocks to Avoid (and 1 to Buy)

2 Stocks to Avoid (and 1 to Buy)

There are valid reasons to buy, sell, or stay put for almost any investment. Not every stock that's trading at all-time highs should be sold, nor avoided. Similarly, not every stock that's down on its luck should be bought based on the simplistic logic that a long-term rebound must be on the horizon -- one may never arrive. This complexity is the reasons why even the best investors bet wrong -- sometimes in a big way.

It's also why the simple narratives don't always make the strongest arguments about whether or not to buy a particular stock. For instance, Cameco Corp. (NYSE: CCJ) and Hecla Mining (NYSE: HL) have near- and long-term growth potential, but there are solid reasons to avoid both companies. Meanwhile, the boring business of A.O. Smith Corp. (NYSE: AOS) might be easy to overlook or dismiss, but its strong cash flow and ample growth opportunities hint that the stock is a buy.

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Source: Fool.com