Never say never, goes the old adage. In the case of some stocks, however, it can be a pretty safe bet. And in the case of these three companies, I feel pretty safe in saying that I'm never going to buy them. 

Here's why you might also want to avoid Tronox (NYSE:TROX), Cloud Peak Energy (NYSE:CLD), and Seadrill Partners.

A man's hand holds a hammer above a broken piggy bank

Some stocks aren't worth buying because they're unlikely to outperform. For me, these three stocks fit the bill. Image source: Getty Images.

A rough stock in a tough industry

Cyclical industries are, by nature, tricky for investors. Miss the beginning of a boom or bust cycle, and suddenly, you've missed the boat. The titanium dioxide (TiO2) industry is one such problem spot. 

TiO2 is primarily used as a white pigment in paint. That makes it heavily reliant on the automotive, construction, and real estate markets. In 2016, these markets -- which had been stagnant -- began coming to life again, and so did the market for TiO2. Shares of Tronox, one of the largest TiO2 manufacturers, came to life, as well, gaining an impressive 561.6% between January 1, 2016, and November 1, 2017.

This occurred despite the fact that Tronox is carrying $3.1 billion in long-term debt. The company has recently improved its cash position to about $1.1 billion and refinanced some of its debt, but -- like many TiO2 companies -- its balance sheet is still worrisome.

Adding to Tronox's problems, the Federal Trade Commission (FTC) filed a complaint in early December to stop the company's proposed acquisition of Saudi competitor Cristal's TiO2 business. That made Tronox's stock drop 25%. Several other TiO2 industry stocks also lost ground, thanks to the FTC'S complaint references to the industry as an "oligopoly." 

With big returns already in the rearview mirror for Tronox, and the industry, as a whole, littered with bad balance sheets and up against a hostile FTC, I can't recommend Tronox, or its industry peers, to anyone. 

A rougher stock in a rougher industry

If you think the TiO2 industry has had it rough, the U.S. coal industry has had it even worse. Environmental regulations and the mass shuttering of coal-fired power plants hit the industry hard, but cheaper and cleaner-burning natural gas is an even worse threat that shows no signs of letting up.

While I maybe could see myself buying into an Australian coal company like Rio Tinto for its dividend -- and Rio Tinto, currently yielding above 4.5%, pays a particularly high dividend for this industry -- I could never picture myself buying Cloud Peak Energy, which not only pays no dividend at all, but its stock price has dropped 78.5% over the last five years. That's even factoring in the "Trump bump" that coal-industry stocks received in the wake of President Trump's election.

Cloud Peak, which operates as a pure play in the Powder River Basin of Wyoming and Montana, has been having a tough year in spite of an improving coal market. The company has posted an aggregate net loss of $24.5 million in the first three quarters of this year, down from a $2.6 million net loss in the first three quarters of 2016. 

Coal, as an energy source, has clearly seen its heyday come and go. I'm not interested in buying in now -- if ever -- especially not without, at least, a dividend payment. 

A tiny stock in the roughest industry

We can argue about whether the offshore oil and gas rig industry is still the "roughest," but there's no denying that, since the oil-price slump in 2014, several offshore rig companies have seen 90-plus percent share-price declines, or have gone belly up entirely. That's the case for the now-bankrupt Seadrill (NYSE:SDRL), which filed for bankruptcy in September. But its separately traded subsidiary, Seadrill Partners LLC, is still afloat... for now.

Seadrill Partners managed to sufficiently untangle its assets and debts from its parents in the nick of time, and now is an independent investment with its own fleet of rigs that needs to be judged on its own merits. While the company is in decent shape -- for an offshore rig operator, anyway -- it's a very small fish in a very big ocean, with a fleet of just 11 rigs. That means it's unlikely to have the pricing power of its larger competitors. It's also unclear what will happen to the bankrupt Seadrill's stake in Seadrill Partners, and how that will affect the company's future.

Offshore plays, in general, are notoriously risky and expensive to develop. Despite some promising offshore discoveries coupled with oil prices rising above $50/barrel in recent months, data compiled by Rystad Energy indicates that, while onshore shale plays have an expected breakeven of $50/barrel, deepwater plays have an expected breakeven of $82/barrel. That's why I won't be buying into this industry anytime soon, or buy Seadrill Partners, thanks to the uncertainty surrounding it.

Investor takeaway

If I wouldn't pick up shares in these three companies -- or even their industries -- for the reasons outlined above, what would I buy? Well, in the energy sector, with oil prices on the upswing, there are several opportunities to pick up some beaten-down shares of big oil companies that pay excellent dividends, or smaller independent drillers that have good growth prospects.

Sometimes, even a low stock price isn't worth the risk.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.