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Don't allow your friends to sing these songs or to buy these stocks -- ever.

The Jacksonville Beach “Margaritaville” Hotel Lobby Bar is perched on the second floor. It looks pretty nice when it’s not 30 degrees outside. You can watch rough Atlantic waves crash over the dune, tourists stroll along the ocean pier, and the “garage-style” windows open to a beautiful deck that light winds kiss.

But the doors were shut during these two cold, sudden winter nights. Last night, the lobby bar was quiet, just a gaggle of tourists complaining about the freak weather. All the action was downstairs at a different hotel bar, where on Thursday, they host karaoke.

At 10:02 pm, I walked in to finish this article. And all I could hear — at the top of a woman’s lungs downstairs — was a voice screaming the lyrics to Eminem’s “Lose Yourself.” It’s an easy song to mess up - to fail to align the lyrics with the beat - and it’s not enjoyable from a full closed door and further level up as it bounds into the ether that is the upstairs cavern.

There are songs that no one should sing at karaoke, just as there are stocks that no one should buy. “Lose Yourself” is at the top of the former list. What are other terrible karaoke songs that align with the stocks you must avoid? I’ll give you three.

How to Avoid Terrible Stocks

Tim Melvin and I have Thanksgiving dinner every year. My father-in-law and I often discuss how to make money by finding safe companies with strong management, little debt, and obvious trends.

To do so, the focus is on two scores. The Piotroski F-Score rates financial health using nine accounting criteria, scoring companies from 0-9. Higher scores indicate stronger fundamentals and better investment potential. The Altman Z-Score predicts bankruptcy risk by measuring financial health through 5 ratios. Scores below 1.8 signal danger, and above 3 indicate safety.

Tim has labeled stocks with F scores of 9 and Z scores of 3 or higher “Perfect Stocks.” The reason? Because management is doing everything possible in the world to enhance shareholder value, these ratings show you precisely what is working in this economy at this moment.

But you can flip this on its side. What isn’t working? What should you avoid? That’s where you find stocks with terrible F and Z scores. And that’s what we’re highlighting today.

The Stock Version of “Ice Ice Baby” Karaoke: Virgin Galactic (SPCE)

Richard Branson's hype around Virgin Galactic is equivalent to Vanilla Ice’s rap career. The company is burning cash faster than rocket fuel while selling millionaires a few minutes of floating around to fund Branson's ego.

Their revenue is minimal, operations are costly, and they've resorted to diluting shareholders through repeated stock offerings to stay afloat. At an adjusted split level, the stock hit $1,118 in June 2021, two years after the reverse merger.

Recently, it’s been trading at around $5.36. The numbers show that it could go bankrupt if it can’t suddenly convince every millionaire on Earth to move to the moon. The F score on this stock is a whopping 3, but none of the management scores regarding stock buying or debt are positive. The Z score is negative, at -3.88.

This company is going broke, and few people will remember it -- unless they are drunk and Ice Ice Baby comes on. Then, hopefully, they’ll remember this article.

The Stock Version of “Fight Song” Karaoke: Fuel Cell Energy (FCEL)

You’re going to fight climate change with massive government subsidies while burning through investor cash. Turn on this song, and watch your money evaporate Fuel Cell Energy.

Fuel Cell Energy is a company that cannot compete with other names in the alternative energy business. However, it also chose the wrong form of energy, as people are turning to nuclear energy instead.

The company is building hydrogen power plants that use investor cash instead of fuel, while its stock is burning through support levels faster than its technology proves viable. But if you read financial media, there’s no shortage of articles asking, “What is the business model?”

I don’t worry about that. The F score: 0. There is no positive metric on the stock. The Z score is negative, at -1.85. It’s burning out. Don’t let it burn your money.

The Stock Version of “Margaritaville” Karaoke: Beyond Meat (BYND)

I’m a fan of Jimmy Buffett's songs. But, essentially, I like the deep cuts. I prefer Tryin’ to Reason With Hurricane Season, Hotel Room, Banana Wind, and Tampico Trauma.

For me, there’s no worse song in karaoke than Buffett’s flagship song: Margaritaville. It could be due to the people screaming, “Salt, salt, salt.” It’s especially due to the instrumental solo.

So, what’s the "Margaritaville” of stocks? It’s Beyond Meat. It’s an overpriced vegetable creation masquerading as meat while their stock price craters faster than their experiments. It’s a company that no one should like, taking on unmanageable debt to produce a product that seemingly no one wants or needs.

This company appears to be so poorly run that I wouldn’t even waste my enemy’s money on it. The F Score is 2. The Z score is negative, at -2.73. Don’t buy stock in this company, even if its products are the last thing to eat on earth.

Conclusion

So, now you know three stocks to avoid. But there are still a total of 89 companies right now on my radar that I wouldn’t touch based on their F and Z scores. These three are the companies that I wouldn’t touch -- even in the face of a short squeeze. I want nothing to do with them.

The market is still rational about debt (and companies will survive so long as they have enough room on their balance sheets to borrow). These companies have continued to bleed lower and lower, even in very liquid markets.

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