For three weeks shy of one year, investors have enjoyed one of the greatest bounce-back rallies in history. Since hitting its bear market lows on March 23, 2020, the benchmark S&P 500 and technology-heavy Nasdaq Composite have rallied 70% and 92%, respectively.

In many ways, we've watched high-quality, innovative businesses and industries drive the broader market higher. But amid this enthusiasm, we've also seen some downright awful companies ascend to the heavens.

As we work our way into March and prepare for the spring thaw, I'd strongly suggest avoiding the following five popular stocks like the plague.

A one hundred dollar bill on fire atop a lit stove burner.

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GameStop

It probably comes as little surprise that topping my list of popular stocks to avoid is retail investor favorite GameStop (NYSE:GME). Despite a late month surge, GameStop ended February lower by 69%, and it's still grossly detached from its underlying fundamentals.

As you may already know, GameStop's record-breaking rally has been fueled by retail investors on Reddit's WallStreetBets chatroom. These investors have agreed to buy shares and out-of-the-money call options in an effort to effect a short squeeze (GameStop is the most short-sold stock, relative to float). On a couple of occasions, this short squeeze and retail euphoria worked, which is what's sent GameStop warping to higher levels.

Unfortunately, the real world doesn't have a cheat code, and there's nothing about the company's rally that looks sustainable. Although holiday e-commerce sales more than quadrupled, this was still not enough to offset sales declines in GameStop's brick-and-mortar operations. Put plainly, it waited too long to shift its focus to digital gaming. While GameStop isn't on life support, it is on track to lose money for a fourth consecutive year in 2021, and is liable to close additional stores at its tries to back its way into the profit column.

A small stack of physical Bitcoin set as bait in a mouse trap.

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Osprey Bitcoin Trust

The newly public Osprey Bitcoin Trust (OTC:OBTC), which acts as a security that holds Bitcoin (CRYPTO:BTC), might actually be even more dangerous than GameStop, for two key reasons.

To begin with, calculating Osprey's net asset value (NAV) is straightforward. The company updates its Bitcoin owned per share and NAV daily. Yet as of the end of February, a share of the Trust was going for $39.92, while its NAV was $15.87. For you math-phobes out there, this means investors are paying a jaw-dropping 152% premium just to own an asset that's supposed to mirror moves in the world's largest cryptocurrency. Regardless of whether you love or hate Bitcoin, paying 152% above par value for any asset is a bad idea

The second reason I'm not a fan is because of Bitcoin itself. While Bitcoin has a huge following and is more widely accepted by merchants than any other cryptocurrency, it's primarily driven by emotions and technical analysis (pretty charts). At no point in the last quarter of a century has a next-big-thing trend or asset held onto a parabolic move without a massive retracement. In my view, this makes the Osprey Bitcoin Trust less than desirable in March.

A couple eating popcorn and watching a film in a crowded movie theater.

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AMC Entertainment

Another popular Reddit stock that should continue to be shunned by investors is movie theater operator AMC Entertainment (NYSE:AMC). Shares of AMC Entertainment fell 40% in February, and like GameStop offer significant downside, based on the company's underlying performance.

To begin with, the coronavirus disease 2019 (COVID-19) pandemic remains a complete wildcard. Whereas some movie theaters in New York will begin reopening later this week, theaters in other states will remain closed or open at significantly reduced capacity. AMC's survival could depend on how quickly and how many Americans choose to get a COVID-19 vaccine. If herd immunity is pushed beyond fall, it's not clear if AMC has the capital to stay in business. For context, AMC raised $917 million via share offerings and debt capital between mid-December and mid-January.

Also, it's not certain that the traditional movie theater operating chain model will remain viable after the pandemic. As an example, AT&T subsidiary WarnerMedia is releasing new movies on HBO Max the same day they'll hit theaters in 2021. Some folks are going to choose the comfort of their couch over the prospect of a packed theater and $7 soda. Suffice it to say, AMC's future looks bleak.

A physical gold Bitcoin lying atop a messy pile of one hundred dollar bills.

Image source: Getty Images.

MicroStrategy

Investors should also avoid business intelligence software company MicroStrategy (NASDAQ:MSTR) like the plague in March.

Although MicroStrategy's operating model is to provide businesses with analytic tools, the only thing its CEO, Michael Saylor, has been focused on of late is buying Bitcoin and adding it to the company's balance sheet. It's one thing for Tesla Motors to purchase $1.5 billion in Bitcoin, which represents a fraction of its available cash, and Saylor to take out more than $1.6 billion in convertible debt to acquire Bitcoin. I view the latter as a highly irresponsible act, especially when Saylor's company didn't have anywhere near the available cash for such large purchases of Bitcoin.

What's more, Saylor has been busy burying MicroStrategy in convertible debt at a time when his company's enterprise analytics business is going backwards. In fact, MicroStrategy just reported its sixth consecutive year with a revenue decline. Until I see Saylor focus his attention on enterprise intelligence, MicroStrategy will remain a stock to avoid.

A gloved processor using scissors to trim a cannabis flower.

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Sundial Growers

Rounding out the list of popular stocks to avoid in March is none other than Canadian marijuana stock Sundial Growers (NASDAQ:SNDL). Sundial, like AMC and GameStop, has been a popular play among the WallStreetBets crowd on Reddit.

While there's little question that cannabis projects as one of the fastest-growing industries of the decade, Sundial looks to be one of the absolute worst ways to play this craze. That's because management has been drowning existing shareholders in new shares via offerings and debt-to-equity swaps. Even though Sundial has lifted its cash on hand to an estimated $680 million (this figure takes into account recent warrant exercising and the Indiva investment), it's raised this capital by increasing its outstanding share count by more than 1.1 billion shares. This is an epic level of dilution -- and I don't mean that in a good way.

Sundial also looks to be bringing up the caboose among Canadian licensed producers. With management making the decision to switch the operating model from wholesale to retail, the company's year-over-year sales comparisons have taken a huge hit. Well behind its peers in the retail department, Sundial could be one of the last licensed producers to approach recurring profitability. In short, it doesn't belong in your portfolio.

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.