Business & Finance
Business and Finance
Business and Finance
Thu, December 16, 2010
Wed, December 15, 2010 Cathay General Bancorp, Carbo Ceramics, Fred's, Inc., Spartan Stores and Texas Industries
CHICAGO--([ BUSINESS WIRE ])--Stocks in this weeka™s article include: Cathay General Bancorp (NASDAQ: [ CATY ]), Carbo Ceramics Inc. (NYSE: [ CRR ]), Fred's, Inc. (NASDAQ: [ FRED ]), Spartan Stores, Inc. (NASDAQ: [ SPTN ]) and Texas Industries, Inc. (NYSE: [ TXI ]). Kevin Matras looks at the 'short ratio' as a market sentiment indicator and shows how to use it for finding winning stocks.
Screen of the Week written by Kevin Matras of Zacks Investment Research:
This week's Screen looks at a market sentiment indicator called the 'short ratio' to find new stock picks.
The short ratio is the number of shares sold short (short interest or bets that the stock will go lower in price) divided by the average daily volume. This is sometimes referred to as the "days to cover" ratio because it tells approximately how many days it will take short-sellers to cover their positions if good news sends the price higher.
The higher the ratio, the longer it would take to buy back the 'sold' (borrowed) shares. And in theory, the more short positions there are to cover, the stronger the short covering rally would be.
Many people who use this indicator like for the number of "days to cover" to be higher than 8-10 days. It's generally believed that a short ratio of that size could prove difficult to cover and therefore trigger a strong rally on any hint of an upswing. (My personal preference is to take that into consideration, but also compare it to the industry's average ratio and the stock's own historical ratio.)
And while I wouldn't recommend using just the short ratio as the 'be all and end all' of screening items, I do think it can be a great tool for helping define great opportunities.
The parameters to this week's screen are:
For the rest of this Screen of the Week article, please visit Zacks.com at:[ http://www.zacks.com/commentary/16495/ ]
Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Dona™t wait for the market to get better before you decide to do better. Start learning how to be a better trader today: [ 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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here [ http://at.zacks.com/?id=112 ]
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros [ http://at.zacks.com/?id=113 ]
Follow us on Twitter: [ http://twitter.com/zacksresearch ]
Join us on Facebook: [ http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts ]
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Visit [ http://www.zacks.com/performance ] for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
