A couple times
a year, it is a good idea to scan the universe of stocks and investigate those
stocks that performed worst over the last 52 weeks; you often find some very
interesting stories, occasionally get some good ideas, and are always reminded
about why diversification matters when you are trading individual stocks
(because you don't want to end up with your entire portfolio in one of the
worst performers).
To scan for
the worst performing stocks is very simple:
CLOSE > 5
MAV20 >
100000
CLOSE/CLOSE250
< 0.3
The first two
criteria are for liquidity (larger companies are generally more interesting,
and there is the potential for an investment if they turn out to be attractively
valued). The last criterion ensures that there was a substantial decline.
Here's the
results of the scan today:
SGTL -
Sigmatel Inc.
BKF - BFK
Capital group
FORD - Forward
Industries
We find FORD
and BKF to be very interesting potential investments.
Forward Industries,
Inc.
FORD has
released statements suggesting a major slowdown in demand. However, the
company has a substantial cash reserve, and despite the short-term setbacks,
has a history of producing good top-line and bottom-line growth.
Management has been straightforward about the growth prospects.
FORD is an
interesting story worth investigating.
BKF Capital
Group, Inc.
BKF has
undergone a major reorganization, and has lost several of its key employees,
and a substantial portion of the client assets that it was managing.
However, several of the new employees have exceptional backgrounds, and may be
able to lead the company to new successes. The company still has several
billion in assets under management, and is trading at book value.
BKF may become
a classic turnaround or a common flop. Either way, it is worth the
research to find out.
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When running
this scan, remember that many more stocks that used to be liquid fell
drastically - the scan only finds a few because most are now not heavily
traded, have prices below $5/share, or no longer exist.
P.S. - Swing Trading is the art of capturing profits in trending stocks in a relatively short amount of time.
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