Investors love a turnaround play, and Wall Street is littered with stories of fortunes made betting on troubled companies.

In the 1960s, American Express (AXP) was rumored to be near bankruptcy when Warren Buffett famously entered what is now one of his favorite Berkshire Hathaway positions. Apple (AAPL), which became the first U.S. company to hit $1 trillion in market value, absorbed more than a decade of losses during the 1980s and '90s before Steve Jobs helped turn the company around - aided by a $150 million investment from Microsoft (MSFT).

But while every beat-up stock is a potential turnaround play, not every company achieves that potential. And losses can mount quickly for a stock that's already up against the ropes. So while you might be tempted to dabble in a potential comeback story or two, beware of some of the most common traps that end in disaster.

Sometimes the issue is too much debt; rising interest costs and balloon payments can turn minor business setbacks into major liquidity challenges. Other times, once-powerful consumer brands are brought to their knees by management that's too slow to adapt to evolving consumer tastes.

Certain areas of the market can be particularly prone to disasters. Start-up biotech stocks are risky because they're racing against the clock to bring new drugs to market before their cash runs out. Disappointing clinical trial result, in these cases, can cut a stock's value in half (or worse) within days. Chinese stocks are problematic, too, because of sometimes poor visibility and weak corporate governance.

Here are 13 stocks to sell if you own them, or avoid if you're on the hunt for the next turnaround story. The companies themselves aren't necessarily an extinction threat, but for varying reasons, they're all on the brink of delivering more disastrous returns.

Arlo Technologies

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Arlo Technologies (ARLO, $4.04) develops products for smart homes such as security cameras, advanced baby monitors and smart security lights and recently introduced a doorbell product with integrated video. It spun off from its former parent Netgear (NTGR) and completed its IPO last August at $16 per share.

At the time of its offering, Raymond James analyst Madison Suhr rated ARLO at Market Perform (equivalent of Hold). He chalked that up to significant competition in the home security market, though he thought the company's products had some key differentiators. Bank of America's Nat Schindler started coverage at Neutral over concerns about competition from Amazon.com () and Google parent Alphabet (), as well as limited visibility into how Arlo would grow its subscription business.