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The following is a list of oversold stocks, as defined by the Relative Strength, or RSI(14), indicator. All of the stocks mentioned below have RSI(14) levels below 40, which usually signals oversold conditions.

In addition, all of these companies have announced stock buybacks over recent weeks.

This list might be an interesting starting point for contrarian investors. If these companies are buying back their own stock, will that provide some support at these oversold levels? Full details below.

RSI(14) and short float data sourced from Finviz, buyback data sourced from RTT News.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


The list is sorted alphabetically.

1. Ameron International Corporation (AMN): General Building Materials Industry. Market cap of $658.88M. The company announced the buyback of $50M on Oct-22-10 (represents about 7.6% of current market cap). RSI(14) at 38.89. Short float at 3.73%, which implies a short ratio of 3.82 days. The stock has gained 8.75% over the last year.

2. Celgene Corporation (CELG):
Biotechnology Industry. Market cap of $25.02B. The company announced the buyback of $500M on Jan-10-11 (represents about 2% of current market cap). RSI(14) at 33.32. Short float at 1.49%, which implies a short ratio of 1.96 days. The stock has lost -8.81% over the last year.

3. Digital River Inc. (DRIV): Internet Software & Services Industry. Market cap of $1.28B. The company announced the buyback of $35M on Oct-25-10 (represents about 2.7% of current market cap). RSI(14) at 38.17. Short float at 12.28%, which implies a short ratio of 6.84 days. The stock has gained 29.38% over the last year.

4. Enzon Pharmaceuticals Inc. (ENZN):
Biotechnology Industry. Market cap of $676.37M. The company announced the buyback of $200M on Dec-21-10 (represents about 30% of current market cap). RSI(14) at 37.91. Short float at 11.3%, which implies a short ratio of 12.81 days. The stock has gained 16.34% over the last year.

5. MedcoHealth Solutions Inc. (MHS):
Drugs Wholesale Industry. Market cap of $26.22B. The company announced the buyback of $3.0B on Feb-02-11 (represents about 11.5% of current market cap). RSI(14) at 39.69. Short float at 1.2%, which implies a short ratio of 1.55 days. The stock has lost -1.92% over the last year.

6. Altria Group Inc. (MO): Cigarettes Industry. Market cap of $49.44B. The company announced the buyback of $1.0B on Jan-27-11 (represents about 2% of current market cap). RSI(14) at 39.46. Short float at 1.53%, which implies a short ratio of 2.69 days. The stock has gained 27.86% over the last year.

7. PetMed Express Inc. (PETS): Drug Delivery Industry. Market cap of $343.07M. The company announced the buyback of $20M on Nov-01-10 (represents about 6.0% of current market cap). RSI(14) at 30.73. Short float at 31.26%, which implies a short ratio of 27.94 days. The stock has lost -17.75% over the last year.

8. The E. W. Scripps Company (SSP): Newspapers, Publishing Industry. Market cap of $531.8M. The company announced the buyback of $75M on Oct-25-10 (represents about 14% of current market cap). RSI(14) at 34.47. Short float at 5.05%, which implies a short ratio of 6.95 days. The stock has gained 31.52% over the last year.

9. Strayer Education Inc. (STRA):
Education & Training Services Industry. Market cap of $1.62B. The company announced the buyback of $150M on Oct-28-10 (represents about 7.6% of current market cap). RSI(14) at 35.48. Short float at 19.13%, which implies a short ratio of 9.77 days. The stock has lost -41.81% over the last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 9 Oversold Stocks Backed by Buyback Programs