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This is a list of six stocks that are deeply in the red for the last quarter (below -20% return). On the positive side of things, all these companies have conservative accounting practices, according to the ratings developed by Audit Integrity.



Audit Integrity was founded in 2002 to develop risk management tools based on a statistical analysis of corporate integrity. The Accounting and Governance Risk (AGR) rating is a forensic measure of the transparency and reliability of a corporation’s financial reporting and governance practices. The closer the score is to 100, the more conservative the company's accounting practices, according to Audit Integrity.

All the companies in this list have high AGR scores and are categorized by Audit Integrity as “Conservative," i.e. more conservative and transparent accounting practices than most other firms.

Given their apparent financial transparency, which of these stocks do you think is ready for a comeback?

1. Newcastle Investment Corp. (NCT):
REIT. Market cap of $348.55M. The stock is down -25.96% over the last quarter. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 97. The stock has performed poorly over the last month, losing 11.64%.



2. Cbeyond, Inc. (CBEY): Diversified Communication Services Industry. Market cap of $372.77M. The stock is down -25.06% over the last quarter. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 96. The stock is a short squeeze candidate, with a short float at 16.29% (equivalent to 21.17 days of average volume). The stock has lost 13.68% over the last year.



3. Overseas Shipholding Group Inc. (OSG): Shipping Industry. Market cap of $854.38M. The stock is down -20.52% over the last quarter. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 96. The stock is a short squeeze candidate, with a short float at 19.3% (equivalent to 6.76 days of average volume). It's been a rough couple of days for the stock, losing 10.81% over the last week.



4. Sinopec Shanghai Petrochemical Co. Ltd. (SHI): Oil & Gas Refining & Marketing Industry. Market cap of $3.59B. The stock is down -20.34% over the last quarter. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 96. The stock has had a couple of great days, gaining 10.45% over the last week.

5. Boyd Gaming Corp. (BYD): Resorts & Casinos Industry. Market cap of $778.16M. The stock is down -21.77% over the last quarter. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 94. This is a risky stock that is significantly more volatile than the overall market (beta = 2.49). The stock is a short squeeze candidate, with a short float at 31.53% (equivalent to 7.08 days of average volume). It's been a rough couple of days for the stock, losing 5.05% over the last week.

6. Finisar Corp. (FNSR): Networking & Communication Devices Industry. Market cap of $2.23B. The stock is down -26.2% over the last quarter. According to Audit Integrity, the company follows conservative accounting practices, with an AGR score of 94. This is a risky stock that is significantly more volatile than the overall market (beta = 2.91). It's been a rough couple of days for the stock, losing 5.55% over the last week.

*AGR scores sources from Audit Integrity, all other data sourced from Finviz.

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

Source: Rebound Ideas: 6 Beaten-Down Stocks With Conservative Accounting Practices