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I insist on using fundamental analysis when evaluating which stocks to invest in, but I think it is important to look at the technical side as well. After doing fundamental analysis, I want to see how a stock looks based on the charts, including what the 50- and 200-day moving averages are, what the relative strength index is at, and other technical indicators before deciding to buy. When evaluating this data, you can find stocks that appear to be starting what might be a significant new uptrend, as well as stocks that are in a serious downtrend.
One sign to watch for is when a stock has hit a low price level and failed to go any lower -- twice. This event is called a "double bottom" and it is viewed as a bullish sign. You can read more about double bottom formations here and more about technical analysis in general here.
The companies below all have a recent double bottom formation. Here are the companies and charts which show "double bottom" in blue:
Amylin Pharmaceuticals (AMLN) shares are trading at $11.15. Amylin is a biotechnology company, based in California. These shares have a 52-week range of $9.51 and $24.21. The 50-day moving average is $13.53 and the 200-day moving average is $16.37.
Fundamentals: Earnings estimates for AMLN are for a loss of 89 cents per share for 2011, and 94 cents loss for 2012. The book value is stated at $2.38. These shares fell hard when AMLN announced disappointing results for their obesity drug.
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EnerNoc, Inc. (ENOC) is trading at $19.04. ENOC provides energy management solutions and is based in Massachusetts. These shares have a 52-week range of $16.63 and $36.75. The 50-day moving average is $20.76 and the 200-day moving average is $27.31.
Fundamentals: Earnings estimates for ENOC are at 38 cents per share for 2011 and 44 cents in 2012. This company has a strong balance sheet with plenty of cash. According to Yahoo Finance, ENOC has almost no debt and about $153 million in cash. The book value is stated at $9.08.
Dex One Corporation (DEXO) is trading at $4.70. DEXO provides marketing solutions for businesses and is based in North Carolina. These shares have a 52-week range of $3.87 and $30.89. The 50-day moving average is $5.34 and the 200-day moving average is $9.71.
Fundamentals: This company has plenty of debt. According to the latest reports, DEXO has about $2.7 billion in debt and only about $128 million in cash. The book value is stated at $10.51. Insiders at this company recently purchased shares in the low $4 range. If management can improve financial results, these shares could rebound sharply.
Lionbridge Technologies, Inc. (LIOX) is trading at $3.52. LIOX provides language learning and testing services, and is based in Massachusetts. These shares have a 52-week range of $3.10 and $6.21, so these shares are trading very close to the 52-week lows. The 50-day moving average is $3.62 and the 200-day moving average is $4.12.
Fundamentals: Earnings estimates for LIOX are at 12 cents per share in 2011, and 24 cents per share in 2012. According to Yahoo Finance, the book value is 80 cents per share. It also states LIOX has about $25 million in debt and about $28 million in cash.
Cogdell Spencer (CSA) is trading at $5.98. CSA is a REIT focused on healthcare facilities and is based in North Carolina. These shares have a 52-week range of $5.57 and $8.52. The 50-day moving average is $5.94 and the 200-day moving average is $6.15.
Fundamentals: Earnings estimates for CSA are about 37 cents per share in 2011, and 43 cents for 2012. The book value is stated at $2.52. The dividend is 40 cents per year, which is equivalent to a yield of 6.9%. This stock dropped when earnings were released on March 4, 2011, and at least one analyst downgraded the stock. Some analysts think CSA is a potential takeover target.
Winn-Dixie Stores (WINN) is trading at $6.77. WINN operates grocery stores and is based in Florida. These shares have a 52-week range of $5.95 and $13.90, so this stock is trading very close to the 52-week lows. The 50-day moving average is $6.76 and the 200-day moving average is $7.49.
Fundamentals: Earnings estimates for WINN are for a loss of 40 cents per share in 2011, and a 25 cent loss per share in 2012. According to Yahoo Finance, the book value is stated to be about $14.83 per share. It also states WINN has about $108 million in cash and about $43 million in debt.
ChinaCache International (CCIH) is trading at $18.45. CCIH, based in China, provides Internet content and application services. These shares have a 52-week range of $14.58 and $35, so these shares are trading fairly close to the 52-week lows. The 50-day moving average is $19.73, and the 200-day moving average is unavailable because this company went public just recently.
Fundamentals: Earnings estimates for CCIH are for a profit of 38 cents per share in 2011, and profits of 68 cents per share in 2012. According to Yahoo Finance, the book value is stated to be $4.29. It also states CCIH has about $2 million in debt, and about $90 million in cash. Stone Fox Capital provides great analysis on CCIH here.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
Source: 7 Stocks That May Have Hit Rock Bottom