Investors who can correctly distinguish between overblown/inflated toxic stocks and the fairly priced stocks see success at the end. But, telling one from the other in such cases is no mean feat. Investors who can precisely identify the toxic stocks and abandon them at the right time are set to benefit.Usually, overpriced toxic stocks are vulnerable to external shocks and are burdened with huge debt levels. The price of toxic stocks is unreasonably high. The artificially high price of the toxic stocks is only temporary as the intrinsic value of the same is lower than the current bloated price.The unrealistically high price of toxic stocks can be due to either an irrational exuberance associated with them or some fundamental drawbacks. Owning such stocks for a long period of time can be detrimental to investors and may result in huge erosion of wealth.Nonetheless, investors may profit from the precise identification of toxic stocks with the help of an investing strategy known as short selling. This strategy allows them 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, identifying toxic stocks and getting rid of them at the right time is the key to guard your portfolio from big losses. Profits can be made by short selling them.Screening CriteriaHere is a winning strategy that will help you to identify overpriced toxic stocks:Most recent Debt/Equity Ratio greater than the median industry average: High debt/equity ratio implies high leverage. 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 this fiscal year and the next during the past 12 weeks points to analysts’ pessimism.Zacks Rank more than or equal to #3 (Hold): 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 four of the 25 toxic stocks that showed up on the screen:Yandex YNDX: Moscow-based Yandex — carrying a Zacks Rank #5 (Strong Sell) and a VGM Score of F — is an Internet-based company that develops technology products as well as services by leveraging the power of machine learning. The Zacks Consensus Estimate for 2021 earnings per share has been revised downward by 41 cents over the past 60 days, implying a year-over-year decline of 34.6%.JD.com, Inc. JD: This Beijing-based firm operates as an online direct sales company in China. The Zacks Consensus Estimate for 2021 earnings per share has been revised downward by 6 cents over the past 30 days, implying a year-over-year decline of 11%. The stock currently carries a Zacks Rank #5.NeoGames S.A. NGMS: Luxembourg-based NeoGamesis a technology-driven provider of end-to-end iLottery solutions for national and state-regulated lotteries. The Zacks Consensus Estimate for earnings for the current year has been revised downward by 9 cents a share over the past 60 days. The stock currently carries a Zacks Rank #4 (Sell).GoodRx Holdings Inc. GDRX: This California-based company is a consumer-focused digital healthcare platform. The stock currently carries a Zacks Rank #4 and has a VGM Score of C. The Zacks Consensus Estimate for 2021 earnings per share has been revised downward by a penny over the past 60 days and implies no improvement on a year-over-year basis.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./woas.zacks.com/zcom/researchwizard/tools3.php?site=ZCOM_RW_IND_ARTICLES" target="_blank" rel="nofollow" rel="nofollow">https://woas.zacks.com/zcom/researchwizard/tools3.php?site=Z...">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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(JD): Free Stock Analysis Report GoodRx Holdings, Inc. (GDRX): Free Stock Analysis Report NeoGames S.A. (NGMS): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research