12 'financial potholes' to avoid now

Markets are losing their smooth ride forward. Markets are down on China fears. And that should be a wakeup call for investors to keep their eyes out for pothole stocks that could rattle them if the markets' weakness continues.

It's not as tough to avoid financial potholes as it sounds. There are 12 stocks in the Standard & Poor's 500 index, including office-supply seller Staples (SPLS), Darden Restaurants (DRI) andConAgra Foods (CAG) that not are not only trading for 8% or more over analysts' 18-month price targets but are also rated "hold," according to data from S&P Capital IQ and analyzed by Paste BN.

Remember that on Wall Street, a "hold" rating really means sell.

What should you listen to the analysts? Analysts have had a good track record this year with their price targets and recommendations. When these analysts, who know the companies better than you are warning to the shares are overvalued, caution is warranted.

So what are these perilous stocks? Take Staples, or instance. You might think the stock is safe since it's not exactly a high flier — and shares are down nearly 9% this year. But the analysts would disagree and think that online competitions means more downside. At Tuesday's stock price of $14.49, Staples is already trading for 12% more than its 18-month price target.

But it's not just loser stocks getting uglier. Medical equipment maker CR Bard (BCR) is up 27% this year. You'd think a performance like that would win lots of allies. That's why you should pay attention that the stock is already 10% past analysts' average 18-month price target and is rated a hold.

The market's recent trouble isn't too scary yet. But analysts are pretty clear on the stocks they think could be the most vulnerable.

Sources: S&P Capital IQ, Paste BN research