Shorting stocks: Broken stocks - Analysis Message Board

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

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To: mortwald who wrote (2168)	4/8/1999 1:19:00 PM
From: Q.	Read Replies (2) of 2506

mort, after the screen gives you 25 candidates, I would start looking at the stock at Yahoo, looking at the profile first to see what the co. does. You'll want to dismiss some stocks right away, for example a real estate investment trust showed up in the list a month ago. Then I would look at the chart, and look at the news to see if there is anything there that explains the stock going down. The I would go to the most recent 10Q or 10k and the DEF-14A at an Edgar site, and start looking. The very best candidates have: balance sheet: little cash large negative retained earnings low shareholders equity large funny assets, for example things that start with 'deferred' cash flow statement: negative cashflow other: a stock that is heading down management turnover severe competition with little to distinguish them from the competition products that are becoming obsolete an auditor's going concern qualification in the 10k a history of financing by private placements using convertibles troubles maintaining their stock listing a string of bad news. You don't often find a stock over $5 with all those problems, though, so you have to decide what is good enough.

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