19 'Babies with Bathwater' and 1 'Dog with Fleas' Stocks for the Week

At the end of each trading week, Hillbent scans the equity market for potential anomalies which exhibit extremely oversold and overbought conditions. Past observations have revealed that such candidates may experience reversal corrections to the upside or downside once the market reconfirms that their fundamentals remain solidly intact or relatively poor. From a contrarian perspective, these lists may also serve as a precursor to changes in institutional sentiment and underlying fundamentals.

(The purpose of this report is not to provide specific recommendations, but instead serve as a time-saving reference tool and starting point for investment ideas as the upcoming trading week unfolds. Of course, the results generated are not always perfect and users are strongly encouraged to perform their own due diligence on these names. Note that overbought and oversold conditions are based upon proprietary algorithms and quantitative models instead of conventional technical analysis indicators. As a supplement to this report, please refer to our ETF Trends Report to determine if market direction trends support a bullish or bearish investment bias over short-term, intermediate, and long-term timeframes.)

1) Stocks with Hillbent’s proprietary "A" (strongest) or "B" (next strongest) ranking in terms of positive fundamentals for revenue and earnings stability comprise what is better known as the "Weekly Babies With Bathwater" watchlist. (See results below)

Weekly Babies With Bathwater (10-23-2009)

			Wkly	Wkly Vol	Avg 5D Vol	Hillbent
Company	Ticker	Price	% Chg	% Chg	% Chg	Grade
Copa Hldgs Sa-A	CPA	$42.03	-9.40	51	29	B
Carrizo Oil&Gas	CRZO	$26.47	-9.47	50	58	A
Deluxe Corp	DLX	$15.18	-10.28	93	29	B
Elan Cp Plc Adr	ELN	$5.31	-20.27	241	230	B
Eagle Materials	EXP	$26.18	-10.80	64	26	B
Hi Tech Pharma	HITK	$21.94	-10.70	19	3	A
Healthsouth Cp	HLS	$15.93	-8.87	50	40	A
Hutchinson Tech	HTCH	$6.20	-9.49	51	75	B
Jefferies Gp-Nw	JEF	$27.29	-8.76	190	119	A
Kirklands Inc	KIRK	$13.43	-9.13	29	-27	A
Orexigen Therap	OREX	$7.65	-10.94	63	-19	B
Omnivision Tech	OVTI	$12.99	-8.91	46	15	B
Riverbed Tech	RVBD	$21.16	-12.27	104	66	A
Scansource Inc	SCSC	$27.01	-9.33	129	50	A
Sangamo Biosci	SGMO	$6.02	-16.85	139	64	B
Skywest Inc	SKYW	$15.03	-8.96	27	0	A
Standard Motor	SMP	$12.33	-17.08	55	20	A
Smith Micro Sof	SMSI	$9.92	-12.29	81	81	B
Sunpower Corp-A	SPWRA	$28.35	-10.29	90	84	B

2) Stocks with Hillbent’s proprietary "E" (weakest) or "D" (next weakest) ranking in terms of negative fundamentals for revenue and earnings stability represent what is better known as the "Weekly Dogs With Fleas" watchlist. (See results below)

Weekly Dogs With Fleas (10-23-2009)

			Wkly	Wkly Vol	Avg 5D Vol	Hillbent
Company	Ticker	Price	% Chg	% Chg	% Chg	Grade
Encore Egy Ptnr	ENP	$18.75	6.05	-7.40	5	D

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

[HATEFEEBAY:]

What about the babies that you listed a few weeks back that have still dropped another 10% like JAG and FCS that dropped well over 10%? So if it was a baby weeks ago and then dropped an additional 10% or so, I wonder where that list is.... hmmmmmm

Oct 26 09:15 AM

[J Clinton Hill:]

hatefeebay:

i can't tell you how to specifically use this list as this investment tool can be as versatile as a swiss army knife in the hands of a professional or experienced trader...

in the wrong hands, the list is also akin to a child playing with a loaded gun...

what is your level of investment experience, e.g. professional, self-employed trader, serious self-directed investor, etc.?

when a stock appears on the BWB or DWF list, it may also signal a shift in institutional sentiment or precursor to some unannounced event. the whole purpose of this list is to give investors & traders clues... not specific buy & sell recommendations... this is why i strongly encourage readers to perform further due diligence...

if a stock is still highly rated, and the fundamental conditions remain bullish or even improve, then a falling share price is favorable from a contrarian view... if the stock was still falling in price when it was brought to your attention, buying it would not be prudent... instead put it on a watchlist and wait for it to find support... that's just my way of doing things

are you up to speed on their most recent quarterly conference calls... can you fairly assess the overall sentiment toward the stock's industry?

myself, i prefer to use both technicals and fundamentals to make my buy & sell decisions... i won't invest in a good stock if the trend is down nor invest in a bad one if the trend is up... that's just a part of my own investment philosophy and risk management strategies... (only a part of it)... also bear in mind that "trading" and "investing" are two different animals... investors will differ on these principles based upon their individual financial circumstances, emotional psyche, etc...

if you are looking for something more specific in terms of investment advice, contact "market-condition at hillbent dot com". i do regularly monitor the companies on this list, but this service is reserved for premium subscribers

good day and thank you for your comments

On Oct 26 09:15 AM HATEFEEBAY wrote:

> What about the babies that you listed a few weeks back that have
> still dropped another 10% like JAG and FCS that dropped well over
> 10%? So if it was a baby weeks ago and then dropped an additional
> 10% or so, I wonder where that list is.... hmmmmmm

Oct 26 12:54 PM

[optionsgirl:]

Hatefeebay:

Take a look where gold futures have been lately, and then, please, explain what it is about JAG's performance surprises you?
futures.tradingcharts....

Oct 26 01:08 PM

[User 345572:]

I don't know where you get you info from but it is seriosly flawed especially about ENP.

Oct 26 06:38 PM

[J Clinton Hill:]

can you please be more specific on your definition of "info" regarding ENP and maybe i can address your question...

i realize that a mother never likes to hear that her child is ugly, but work with me on this one and maybe i can learn something too...

thanks...


On Oct 26 06:38 PM User 345572 wrote:

> I don't know where you get you info from but it is seriosly flawed
> especially about ENP.

Oct 26 07:23 PM

[Road Runner:]

I agree that SunPower (SPWRA and SPWRB) is a "baby in the bathwater". They had a very good earnings release, but the stock dropped dramatically. Personally, I believe that the huge stock sale right after the earnings release was timed to created a very negative stock chart. In other words, I believe it was stock price manipulation.

But, I don’t believe that the price of SunPower will recover any time soon, like in the next 2 months, though I could be wrong. It’s all a matter of how soon and fast the general investment community figures out that SunPower is a strong company that is growing quickly. It is not affected by the current world-wide glut in solar panels, and it isn’t as affected as much as other solar companies by the banking crisis.

Oct 27 07:31 PM

[cato:]

This evinces the dangers of conducting brain-dead screens on stocks. When you know nothing about the underlying stock, these screens are much worse than worthless.

ENP is an MLP. As such, its numbers must be viewed very differently. For example, GAAP EPS is not meaningful at all, because it does not account correctly for the massive Oil and Gas hedging upstream MLPs like ENP have. For companies like LINE and ENP, hedging income accounts for a moeity of their revenue right now.

The key metric for these companies is not EPS, but Distributable Cash Flow (DCF) -- which ENP has up the wazoo. In fact, it just reported earnings tongith with enough DCF to increase the distribution again. Tell me, how many of your recommended stocks have increased dividends lately?

What's more ENP has 140% coverage of that distribution (plenty of room to increase some more). That's better coverage than just about any company in the MLP space.

Boy you really blew that one. Hope you didn't do something really stupid like short it.

Oct 27 09:33 PM

[J Clinton Hill:]

<img class="authors_reply" src="static.seekingalpha.co...">

<img class="authors_reply" src="static.seekingalp...

hi cato:

thanks for sharing your research efforts on ENP...

yes, this screen is a quantitative filter for both fundamentals & technicals. i acknowledge in the preface of the report that it is not perfect and unfortunately it is unable to exclude a "MLP"... just based upon its technicals, it slipped thru the cracks and as i write this reply, ENP is down @ 5% in just 3 days vs. the SPY being down @ -2.4% over the same period on an intraday basis.

when used in conjunction with our market direction reports, most of the stocks results yielded from this screen tend to be right..

the whole purpose of this report is to create a reference point for investment ideas and not specific recommendations, which is also strongly emphasized in the preface of this report. in fact, the only thing i recommend is that readers do their own due diligence like you just did before taking any decisive action.

at any given week, the screen can generate up to 40 different stocks, a number that makes it impractical to research thoroughly, especially without compensation...

there is a premium version of this report that includes decision support research for more in-depth fundamental analysis and market-timing... the manner in which i interpret and apply the results is often non-linear and will vary, e.g. ratio spreads, options, and bullish or bearish positions for both babies or dogs. at the moment, the report is currently unavailable to retail investors, but enough clues are provided to point people in the right direction most of the time.

on the surface the report appears to be simple, but there's a lot more substance underneath the hood in terms of algorithms and proprietary inputs. to keep it user friendly, the format is intentionally presented in a simple an streamlined manner. as i have said before, in the right hands of a professional, the report is a pretty versatile tool and comparable to a swiss army knife.

i sincerely appreciate your comments because this report has accomplished another important objective and that is encourage further research efforts from readers and provoke them to share their opinions and discoveries for the benefit of others as well as themselves.

if i could get more people to take me to the mat like you just did, then i consider myself to have done my job well, i.e. empower people to help themselves and help others...

thanks again.... take care and have a great day!


On Oct 27 09:33 PM cato wrote:

>
> This evinces the dangers of conducting brain-dead screens on stocks.
> When you know nothing about the underlying stock, these screens are
> much worse than worthless.
>
> ENP is an MLP. As such, its numbers must be viewed very differently.
> For example, GAAP EPS is not meaningful at all, because it does not
> account correctly for the massive Oil and Gas hedging upstream MLPs
> like ENP have. For companies like LINE and ENP, hedging income accounts
> for a moeity of their revenue right now.
>
> The key metric for these companies is not EPS, but Distributable
> Cash Flow (seekingalpha.com/symb... -- which ENP has up
> the wazoo. In fact, it just reported earnings tongith with enough
> DCF to increase the distribution again. Tell me, how many of your
> recommended stocks have increased dividends lately?
>
> What's more ENP has 140% coverage of that distribution (plenty of
> room to increase some more). That's better coverage than just about
> any company in the MLP space.
>
> Boy you really blew that one. Hope you didn't do something really
> stupid like short it.

Oct 28 12:04 PM

[cato:]

And up over 5% today. It's a higher beta stock.


On Oct 28 12:04 PM J Clinton Hill wrote:

>
> just based upon its technicals, it slipped thru the cracks and as
> i write this reply, ENP is down @ 5% in just 3 days vs. the SPY being
> down @ -2.4% over the same period on an intraday basis.
>
> when used in conjunction with our market direction reports, most
> of the stocks results yielded from this screen tend to be right..
>
>
> the whole purpose of this report is to create a reference point for
> investment ideas and not specific recommendations, which is also
> strongly emphasized in the preface of this report. in fact, the only
> thing i recommend is that readers do their own due diligence like
> you just did before taking any decisive action.
>
> at any given week, the screen can generate up to 40 different stocks,
> a number that makes it impractical to research thoroughly, especially
> without compensation...
>
> there is a premium version of this report that includes decision
> support research for more in-depth fundamental analysis and market-timing...
> the manner in which i interpret and apply the results is often non-linear
> and will vary, e.g. ratio spreads, options, and bullish or bearish
> positions for both babies or dogs. at the moment, the report is currently
> unavailable to retail investors, but enough clues are provided to
> point people in the right direction most of the time.
>
> on the surface the report appears to be simple, but there's a lot
> more substance underneath the hood in terms of algorithms and proprietary
> inputs. to keep it user friendly, the format is intentionally presented
> in a simple an streamlined manner. as i have said before, in the
> right hands of a professional, the report is a pretty versatile tool
> and comparable to a swiss army knife.
>
> i sincerely appreciate your comments because this report has accomplished
> another important objective and that is encourage further research
> efforts from readers and provoke them to share their opinions and
> discoveries for the benefit of others as well as themselves.
>
> if i could get more people to take me to the mat like you just did,
> then i consider myself to have done my job well, i.e. empower people
> to help themselves and help others...
>
> thanks again.... take care and have a great day!

Oct 29 11:20 AM