20 'Babies with Bathwater' and 7 'Dogs with Fleas' Stocks for the Week

by: J Clinton Hill

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 Market 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 (01-15-2010)

Wkly Wkly Vol Avg 5D Vol Hillbent
Company Ticker Price % Chg % Chg % Chg Grade
Analog Devices ADI $28.96 -8.03 144 50 A
Ak Steel Hldg AKS $23.66 -8.19 20 34 A
Cemig Sa -Adr CIG $17.03 -6.74 25 7 A
Cliffs Natural CLF $49.75 -6.34 22 5 A
Canadian Solar CSIQ $25.93 -20.66 90 89 A
E-House China EJ $16.79 -12.09 56 33 A
Genesco Inc GCO $24.98 -13.47 76 21 A
Hi Tech Pharma HITK $25.63 -10.32 16 33 A
Jinpan Intl Ltd JST $43.61 -10.30 24 44 A
Korn/Ferry Intl KFY $15.18 -10.60 39 0 A
Kla-Tencor Corp KLAC $33.34 -10.18 79 48 A
Linear Tec Corp LLTC $28.72 -7.03 99 111 A
Lam Research LRCX $36.82 -8.75 68 76 A
Newpark Resour NR $4.13 -8.02 27 14 A
Novellus Sys NVLS-OLD $22.13 -8.02 40 35 A
Rf Micro Device RFMD $4.28 -10.27 58 69 A
Solarfun Power SOLF $8.48 -15.87 15 108 A
Trina Solar Ltd TSL $49.50 -18.80 183 143 A
Vanguard Naturl VNR $21.32 -8.50 66 66 A
Xilinx Inc XLNX $23.52 -5.92 14 40 A
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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 (01-15-2010)

Wkly Wkly Vol Avg 5D Vol Hillbent
Company Ticker Price % Chg % Chg % Chg Grade
Cepheid Inc CPHD $15.30 6.40 -20 34 D
First Cash Finl FCFS $22.99 5.70 -26 -14 D
Lasalle Htl Prp LHO $22.52 5.68 -13 -14 D
Palm Inc PALM $13.56 9.09 -29 30 D
Phh Corp PHH $17.93 5.16 -12 17 E
Sturm Ruger&Co RGR $11.20 7.59 -45 7 D
Spartan Stores SPTN $13.48 7.67 -60 15 E
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Disclosures: Hillbent does not provide individualized market advice. The information we publish regards companies in which we believe our readers may be interested and our reports reflect our sincere opinions. Nevertheless, they are not intended to be personalized recommendations to buy, hold, or sell securities. Investments in the securities markets, and especially in options, are speculative and involve substantial risk. Each individual investor should determine their respective appropriate level of risk. It is recommended that you seek personal advice from your professional investment advisor and conduct further independent due diligence research before acting on information published in any of our reports. Most of our information is derived directly from information published by the companies on which we report and/or from other sources we deem to be reliable, without our independent verification.

Therefore, we cannot assure the completeness or accuracy of information contained within these reports and we do not in any way warrant or guarantee the success of any action which you take in reliance on our statements.

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.