Top Picks: Seven big-name stocks to avoid

Sometimes bad stocks happen to good companies.

That's not a moral judgment; it's merely a reminder that shares and the corporations that issue them are not the same thing. After all, the best company in the world isn't worth buying into if its stock is too expensive -- and likely to fall. The reverse also holds true: Just because a company's business is in the dumps doesn't mean its shares aren't oversold -- and poised for a pop.

That's why a stock that fetches $500 can be said to be "cheap," while a $5 stock can be said to be "expensive." It's not the face-value of equities that investors need to focus on -- it's the valuation and, of course, the fundamentals.