19 'Bathwater Babies' for the Week

At the end of each trading week, Hillbent scans the market for extremely oversold stocks with a proprietary "A" (strongest) or "B" (next strongest) ranking in terms of positive fundamentals for revenue and earnings stability. The generated result is better known as the "Weekly Babies With Bathwater" watchlist.

Past observations have revealed that such candidates may experience reversal corrections to the upside once the market reconfirms that their fundamentals remain solidly intact.

(The purpose of this list is not to provide specific recommendations, but instead serve as a starting point for investment ideas as the upcoming trading week unfolds. Please refer to our Market Condition Report to determine if market direction trend analysis supports a bullish or bearish investment bias. )

Disclosures: Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Comments

[Dan Jacome:]

How do you determine if its oversold - what is the process??

Jan 11 12:26 PM

[Dan Jacome:]

SXCI is down another 10% today, that is why these sort of articles with very little detail barely help investors long some of these names.

Jan 12 10:52 AM

[J Clinton Hill:]

Dan, I usually don't reply but as I sense your frustration, I will try my best. (I have much more patience with the market than I do with people.)

Determination of oversold stocks is based upon a proprietary algorithm that is non-related to stochastics or relative strength although these indicators overlap sometimes.

As a money manager and ex-hedge fund manager, I'm may be looking at the same market but thru a different prism. I don't know what your investment process is, so I can't say. Oversold stocks can remain oversold for quite a while as markets can behave irrationally a helluva lot longer than most can remain solvent.


The objective of this screen is not to recommend a buy, sell, or hold on a specific stock, but to identify names with potentially sound fundamentals that are being oversold based upon institutional buying & selling pressure patterns.

Now it's up to you or other readers to do your homework and determine if the fundamental reasons you own or want to buy these stocks remain intact. Personally, I use this list to stalk stocks and watch them for hints of fresh institutional rotation/support. This requires some patience, but it can be rewarding. Besides, it's much easier to hunt and learn the habits of a smaller group than follow a large universe. Think of yourself as an assassin waiting to pull the trigger when the odds are more in your favor. When you get that final capitulation, chance favors you the most.

If you don't own this stock and it has fallen another 10%, you should be as happy as a pig in shit. On the other hand, if you do own it, then it's a risk management issue and only you can determine what's acceptable for a loss.

Now let's be realistic. The stock has made a 57% run from Oct-23-2008 thru Jan-06-2009. During the same period, the SP-500 eked out only a 2.93% return. This is a relatively strong stock and I suspect there are good fundamental reasons for its superior performance, but it is undergoing a price correction. Trees don't grow to the sky, unless you believe in "Jack and the Beanstalk". Incidentally, the company is in the right space/sector too, i.e. healthcare info technology. If you read the details on the last employment report, the healtcare sector is the only group that continues to increase new jobs in our economy while all the others contracted.

Hey man, I'm just trying to help people focus on potential opportunities and I don't even get paid for this shit, i.e. blogging. I do give specific investment advice, but only when people pay for it as a premium service at my website.

Good luck with your investing and trading. If you are looking for the Holy Grail, you will find it within yourself and nowhere else. Believe it or not, it (the Holy Grail) actually does exist. Trust me on this one....

Sincerely,

J Clinton Hill

On Jan 11 12:26 PM Dan Jacome wrote:

> How do you determine if its oversold - what is the process??

Jan 14 02:42 AM

[david roper:]

Clinton, your picks here are wonderful. Thanks for sharing. In fact two of these are ones I already owned for the same reasons you stated. They are just oversold and "tossed out". I like NAT and QCOR in your list.

With the current unstable market, I AM that pig in shit and I hate to admit it but violent swings are the norm now for me and I'm getting used to it a little bit.

OMG, I can't believe I just admitted to that!

Jan 23 08:54 AM