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We continue to be impressed by the offerings in the SeekingAlpha App Store, particularly the MarketGrader app. [Ed: The Application Platform/Store is currently in beta and available only to contributors. It will go live to all users in October.]

The company uses a quantitative approach to analyze a company's financial statements. Here's a summary of their approach:

MarketGrader analyzes a company from four perspectives: Growth, Value, Profitability and Cash Flow. Each one of these categories is in turn comprised of six indicators, many of which vary based on the company’s industry or sub-industry in order to measure the differences across diverse business models. Each indicator is assigned a letter grade from A+ to F, and each letter grade is assigned a numerical equivalent used to calculate our overall grade. Therefore if a company receives a grade of ‘A+’ in all 24 indicators, it will receive a perfect overall grade of 100. While we’ve never had a company get a perfect score since we started keeping track of our grades in 2003, we’ve had plenty of companies score very highly, in the 80s and 90s. All companies with an overall grade of 60 or higher are given a ‘buy’ rating; a ‘hold’ is given to all grades between 50 and 59 and a ‘sell’ is given to all grades between zero and 49.

If you'd like to put their research to the test, the following list might be a good starting point. We looked at a group of oversold stocks, as defined by the RSI(14) indicator. We then filtered the universe by MarketGrader scores.

All of these stocks have a "Buy" rating according to MarketGrader. Short ratio data sourced from Finviz.

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1. ITT Educational Services Inc. (ESI): Education & Training Services Industry. Market cap of $1.81B. RSI(14) at 26.18. MarketGrader score at 84.6. Short float at 22.83%, which implies a short ratio of 5.35 days.

2. SanDisk Corp. (SNDK): Semiconductor Industry. Market cap of $8.34B. RSI(14) at 26.65. MarketGrader score at 83. Short float at 3.57%, which implies a short ratio of 0.68 days.

3. DeVry, Inc. (DV): Education & Training Services Industry. Market cap of $2.72B. RSI(14) at 27.15. MarketGrader score at 80.9. Short float at 3.25%, which implies a short ratio of 1.39 days.

4. Corinthian Colleges Inc. (COCO): Education & Training Services Industry. Market cap of $410.69M. RSI(14) at 27.4. MarketGrader score at 78. Short float at 26.57%, which implies a short ratio of 3.94 days.

5. Satyam Computer Services Ltd. (SAY): Information Technology Services Industry. Market cap of $3.03B. RSI(14) at 29.71. MarketGrader score at 76.2. Short float at 0.19%, which implies a short ratio of 1.89 days.

6. Net 1 Ueps Technologies Inc. (UEPS): Business Services Industry. Market cap of $606.28M. RSI(14) at 27.63. MarketGrader score at 75.5. Short float at 2.09%, which implies a short ratio of 2.09 days.

7. DG FastChannel, Inc. (DGIT): Business Services Industry. Market cap of $772.15M. RSI(14) at 24.49. MarketGrader score at 73.4. Short float at 13.02%, which implies a short ratio of 5.1 days.

8. Intuitive Surgical, Inc. (ISRG): Medical Appliances & Equipment Industry. Market cap of $10.54B. RSI(14) at 29.42. MarketGrader score at 73. Short float at 7.64%, which implies a short ratio of 5.19 days.

9. Hewlett-Packard Company (HPQ): Diversified Computer Systems Industry. Market cap of $89.22B. RSI(14) at 27.56. MarketGrader score at 71.9. Short float at 0.86%, which implies a short ratio of 0.87 days.

10. American Public Education, Inc. (APEI): Business Services Industry. Market cap of $472.35M. RSI(14) at 22.4. MarketGrader score at 68. Short float at 10.82%, which implies a short ratio of 5.41 days.

11. China Life Insurance Co. Ltd. (LFC): Life Insurance Industry. Market cap of $111.19313B. RSI(14) at 22.84. MarketGrader score at 63.5. Short float at 0.56%, which implies a short ratio of 4.26 days.

12. Prosperity Bancshares Inc. (PRSP): Regional Bank. Market cap of $1.36B. RSI(14) at 29.96. MarketGrader score at 63. Short float at 7.81%, which implies a short ratio of 9.65 days.

13. San Juan Basin Royalty Trust (SJT): Diversified Investments Industry. Market cap of $1.04B. RSI(14) at 28.31. MarketGrader score at 60.9. Short float at 1.08%, which implies a short ratio of 2.31 days.

14. NutriSystem Inc. (NTRI): Consumer Services Industry. Market cap of $481.87M. RSI(14) at 29.14. MarketGrader score at 60.4. Short float at 42.22%, which implies a short ratio of 18.94 days.

15. Community Health Systems, Inc. (CYH): Hospitals Industry. Market cap of $2.52B. RSI(14) at 28.4. MarketGrader score at 60.3. Short float at 3.68%, which implies a short ratio of 2.33 days.

16. Education Management Corporation (EDMC): Education & Training Services Industry. Market cap of $668.38M. RSI(14) at 23.45. MarketGrader score at 60.1. Short float at 7.35%, which implies a short ratio of 9.41 days.

Disclosure: No positions

Source: 16 Oversold Stocks With Solid Fundamentals