6 Hated Stocks to Stay Away From

As of the most recently reported quarter, Sprint was one of Greenlight Capital's holdings.

Bank of America

There continues to be a great deal of unease around large banks in general and Bank of America (BAC) in particular: 255 million shares of this stock are held in short accounts. On a macro level, there are continuing concerns that the European economic crisis will eventually spiral out of control, which would wreak havoc on the global banking system.

>>5 Financial Stocks Ready for Bigger Dividends

BofA and other large U.S. banks have noted that they don't have a tremendous amount of direct exposure to Europe, thanks to hedges, but memories of Lehman Bros. and Bear Stearns and of how they suffered in a period of chaos remain fresh for many investors -- especially short-sellers.

BofA is also being targeted because it's "the worst house in a bad neighborhood." This bank made so many bad moves in the past five years that investors are now convinced that the next blunder is right around the corner. Bank stocks are clearly inexpensive, as many of them -- including BofA -- trade for well below book value. But short-sellers think the tenuous global economy will push down shares before a more stabilized operating environment brings back the buyers.

For another take on Bank of America, it also shows up on a list of 8 Post-Downgrade Bank Stock Bargains.

Nokia

It's awfully tempting to go long with beaten-down smartphone provider Nokia (NOK). Shares have fallen from $40 in 2007 to under $2, and many are paying attention to the company's ambitious turnaround strategy that hitches the company's fortunes to Microsoft's (MSFT) new mobile phone software.

But signs of a turnaround should have begun by now, and it's increasingly clear that Nokia won't be able to crack the hegemony of the Apple (AAPL)/Google (GOOG) smartphone duopoly. Management continues to radically cut costs to preserve cash, which is in stark contrast to the aggressive forward-thinking moves that Apple, Google, Samsung and others are taking.

Short-sellers, who now control 170 million shares, are guessing that Nokia's financial pressures deepen, and a few have begun to speak of a possible bankruptcy in a year or two.

Chesapeake Energy

Energy producer Chesapeake Energy (CHK) has amassed a very impressive set of assets, especially in the gas producing shale regions found across North America. Trouble is, the company borrowed way too much to buy up all that acreage, mistakenly assuming that robust cash flow from high gas prices would cover the debt.

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