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

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To: Q. who wrote (2096)	3/16/1999 12:05:00 AM
From: Q.	Read Replies (3) of 2506

Here are the stocks for the Mar. 99 low RS / neg cash flow screen. The screen is intended to find companies that have liquidity problems and a beaten-down stock price that suggests more problems to come. I did this screen on Mar. 15. The top 25 stocks were as follows, listed with the lowest 18-week RS first: fxen heb ifci apos asvi cvol mcar inis artc xybr thor tmbs pprt sff tsi umh knsy imnr gern diti pgnx cgpi crwf ilxo abio click the link below to see yahoo's detailed report on all 25 stocks: quote.yahoo.com Note the short-sellers favorites at the top of the list: HEB. I'm short MCAR already. UMH is a REIT with a reasonable yield; this is definitely a value stock that defeated the screen's filters to keep such things out. =====================================Boiler plate info: ============ How the scan was done: I used Telescan's Prosearch, available on the web (for a subscription) at tscn.com Search 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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