Red flags that may disqualify a stock

Earnings & Liquidity Red Flags:
1. Consecutive quarters of declining earnings
2. A company's cash shrinking or debt increasing
3. Decelerating sales growth
4. Shrinking profit margin
5. Company in heavy debt and does not have enough cash to settle the debt
6. Stock dilution risks in terms of frequent cash calls or share placements
7. It’s within 2-3 days of its ER or company beats ER but the stock goes down

Market Move Red Flags:
1. Heavy short selling (if a company's shares are the target of short-sellers)
2. Stock trading volume less than 100 million dollars 
3. The stock has over 300 million shares available
4. The stock price is at its 52 weeks high
5. A reverse stock split has happened in the past year or is coming up
6. The charts are all over the place showing no real trend
7. The history shows a clear underperformance compared to the index
8. PE above 20
9. One that is delisting
10. When Good news keeps rolling in but price keep going down

Company's Move Red Flags: 
1. Unusual insider sales or Insiders haven’t bought any shares in the past year
2. Frequent change of auditors or change auditors abruptly
3. Prospectus filings that are open or they have filed 2 or more in the past year
4. The company has added more employee options(free shares)
5. An abrupt management change
6. Bad management: ROIC less than 15%
7. Dividends cut or “overpaid” dividend
8. The buyback is happening at a rapid pace, regardless of price
9. Companies that rely on a few large customers

Other Red Flags: 
1. Heavy Industry pressure
2. A bad culture / unhappy staff, fraud, and dishonesty, or with an ethical issue, or entangled in scandals and controversy
3. Having earnings reports or calls where no financials are discussed
4. There isn’t much history
5. Financial Statements： No Action Talk Only
6. About trading penny stock: trading on penny stocks are not suitable if an investor does not adopt an attitude of trading with great diligence and only risk what he can afford to lose.
7. A stock where the country regulations for that industry can change anytime without warning
8. When everyone is talking up a stock, from the CEO on TV to the fund manager on conference calls, to the bus driver on his daily drive
9. Business is too complicated to understand 
10. No jobs page

Warning Signal: You may use Moomoo feature to watch out for red flags! Good luck with your trading!

Thank you mooers once again for their excellent ideas. Rewards have been issued to the winners' accounts. Leave your comment below for the red flags that you agree with, or any other ideas you have in mind.

Disclaimer: The above ideas are thoughts and opinions of the author and do not necessarily reflect the opinions, views, or positions of Moomoo.