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Strategies & Market Trends : Shorting stocks: Broken stocks - Analysis

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To: Q. who wrote (2076)	2/13/1999 2:29:00 PM
From: Q.	Read Replies (5) of 2506

Here are the stocks for the Feb. 99 low RS / neg cash flow screen. I did this screen on feb. 13 The top 25 stocks were as follows, listed with the lowest 18-week RS first: dstm cvol wrdp sff umh srcl inis abio sndcf diys heb gty satc ulti asvi vphm matk synm dmi gcli uqm mmp mcar sbtk spze click the link below to see yahoo's detailed report on all 25 stocks: quote.yahoo.com comment: this month there are a number of stocks with significant cash/share that crept into the list, due to the lack of many stocks with very low 18-week stock price performance, which is the time span used for finding low RS in this screen. It just happens that 18 weeks ago was nearly the bottom of a selling panic that was particularly vicious to small caps, which subsequently rebounded. =====================================Boiler plate info: ============ How the scan was done: I used Telescan's Prosearch, available on the web (for a subscription) at tscn.comsearch components were: shortability: price > $5 30 day ave vol > 5 k small cap: $20 M < market cap < $200 M low RS: rel performance 18 weeks : low as possible eliminate value stocks: p/b > 3 p/s > 2 free cash flow < 0 cash/price ratio : low as possible I optimized the above parameters in May and June 1998, which was soon after a small cap market peak, by backtesting the results (I played with the p/s, p/b ratios, the time span for the low RS, etc.) and this is the set of parameters that did the best over the previous 3-6 months. The returns from this screen are probably best over a 3+ month holding period.

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