Business & Finance
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Thu, March 5, 2009Wed, March 4, 2009Tue, March 3, 2009Mon, March 2, 2009Sun, March 1, 2009Sat, February 28, 2009Fri, February 27, 2009Thu, February 26, 2009Wed, February 25, 2009Tue, February 24, 2009Mon, February 23, 2009Zacks.com featured expert Kevin Matras highlights: Cooper Industries, Ltd., Cabot Oil & Gas Corp., Deere & Company, Potlatch Co
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Published in Business and Finance on Thursday, February 26th 2009 at 12:47 GMT, Last Modified on 2009-02-26 12:48:48 by Market Wire🞛 This publication is a summary or evaluation of another publication
CHICAGO--([ BUSINESS WIRE ])--Kevin Matras explains how to find the best stocks to short. Stocks in this week's article include Cooper Industries, Ltd. (NYSE: CBE), Cabot Oil & Gas Corp. (NYSE: COG), Deere & Company (NYSE: DE), Potlatch Corp. (NYSE: PCH) and RBC Bearings, Inc. (NASDAQ: ROLL). Click here for the full story exclusively on Zacks.com: [ http://at.zacks.com/?id=109 ]
Screen of the Week written by Kevin Matras of Zacks Investment Research:
With the market in a downtrend, one of the best ways to make money has been on the short side.
One of my favorite things lately has been to find companies with earnings that are projected to be lower than last year AND earnings for next year that are projected to be lower than this year. Seems simple enough, but you'd be surprised at how many companies are projected down this year but up the next. (Of course, expecting to be up and actually being up are two totally different things.)
But finding those companies whose 'recoveries' are in the more distant future make these companies (in my opinion) last on the list to buy once we hit bottom. They are also some of the best candidates to short until then (and even beyond).
One of the reasons I like this concept is because most analysts seem to take a pretty optimistic view in the future. Maybe it's human nature.
I secretly call this the Chicago Cubs effect. (I guess it's no secret now.) What's the old adage after the Cubs blow it every year? "Wait 'til next year." (I'm allowed to say this as I'm a Cubs fan. And Sox for that matter.) But the future is always brighter, or so it seems.
But what if these analysts get even more sour on the companies' prospects? Not a good sign. And if you still believe the views are a bit optimistic, then there's likely even more pain in store than what is forecast.
So in this week's screen, we're screening for:
* This Year's Projected EPS less than Last Year's Actual EPS
(F1 < F0) (Estimate if not reported yet)
* Next Year's Projected EPS less than This Year's Projected EPS
(F2 < F1) (There's the Cubs effect – "wait 'til next year" – not.)
* Zacks Rank greater than or equal to 4
(Which means Sells and Strong Sells)
* % Change in F1 Est. over 12 weeks less than 0
(This year's earnings estimates being revised down.)
* % Change in F2 Est. over 12 weeks less than 0
(Next year's earnings estimates are being revised down also.)
* Current Price greater than or equal to 10
* Volume (Avg. 20 Days Shares) greater than or equal to 100,000
Here are a few stocks from this week's screen (2/24/09):
CBE Cooper Industries, Ltd.
COG Cabot Oil & Gas Corp.
DE Deere & Company
PCH Potlatch Corp.
ROLL RBC Bearings, Inc.
Get the rest of the stocks on this list and start looking for these kinds of companies on your own. But remember, the market won't go down forever. So start planning your buying strategy now to be ready for when the market finally does turn around. You can do it. Sign up for a free trial to the Research Wizard today and start putting your plan together right now: [ http://at.zacks.com/?id=111 ]
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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