11 Oversold Stocks With Low Corporate Governance Risk

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 |  Includes: AMKR, AN, BAC, GS, INTC, MAIN, MS, MSFT, THC, USB, WFC
by: Kapitall

Looking to invest in companies with good corporate governance systems in place? This list might offer a great starting point for your own analysis.

To compile this list we looked for stocks with the following characteristics:

  • U.S. Stocks with market caps above $300M
  • Oversold by the RSI(14) indicator, i.e. RSI (14) < 40
  • And with low Governance Risk Indicators according to the RiskMetrics Group

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RiskMetrics introduced the Governance Risk Indicator in 2010 and it evaluates the following governance areas:

  • Audit Risk
  • Board Structure Risks
  • Shareholder Rights
  • Compensation Risks

The companies in this list have low risk levels in each of these governance areas, in comparison to the standard market practices.

Given that these stocks appear to be oversold and seem to have the appropriate checks and balance system in place, which of these companies do you find more attractive to add to your portfolio?

(Note: RSI values collected on Thursday afternoon)

1. Amkor Technology, Inc. (NASDAQ:AMKR): Semiconductor Industry. Market cap of $1.26B. RSI(14) at 31.38. Might be undervalued at current levels, with a PEG ratio at 0.71, and P/FCF ratio at 12.99. The stock is a short squeeze candidate, with a short float at 10.17% (equivalent to 6.85 days of average volume). It's been a rough couple of days for the stock, losing 7.56% over the last week.

2. AutoNation Inc. (NYSE:AN): Auto Dealerships Industry. Market cap of $4.93B. RSI(14) at 39.17. The stock is a short squeeze candidate, with a short float at 9.5% (equivalent to 10.89 days of average volume). After a solid performance over the last year, AN has pulled back during recent sessions. The stock is -5.23% below its SMA20 and -2.89% below its SMA50, but remains 20.63% above its SMA200. The stock has gained 68.71% over the last year.

3. Bank of America Corporation (NYSE:BAC): Banking Industry. Market cap of $134.31B. RSI(14) at 33.2. The stock has lost 31.67% over the last year.

4. The Goldman Sachs Group, Inc. (NYSE:GS): Diversified Investments Industry. Market cap of $83.37B. RSI(14) at 38.67. The stock has lost 12.26% over the last year.

5. Intel Corporation (NASDAQ:INTC): Semiconductor Industry. Market cap of $106.52B. RSI(14) at 35.42. Might be undervalued at current levels, with a PEG ratio at 0.85, and P/FCF ratio at 13.34. The stock has lost 15.76% over the last year.

6. Main Street Capital Corporation (NYSE:MAIN): Diversified Investments Industry. Market cap of $345.50M. RSI(14) at 38.18. The stock has gained 23.65% over the last year.

7. Morgan Stanley (NYSE:MS): Investment Brokerage Industry. Market cap of $41.51B. RSI(14) at 32.93. The stock has lost 12.59% over the last year.

8. Microsoft Corporation (NASDAQ:MSFT): Application Software Industry. Market cap of $215.35B. RSI(14) at 37.31. The stock has lost 15.13% over the last year.

9. Tenet Healthcare Corp. (NYSE:THC): Hospitals Industry. Market cap of $3.18B. RSI(14) at 35.92. This is a risky stock that is significantly more volatile than the overall market (beta = 2.3). After a solid performance over the last year, THC has pulled back during recent sessions. The stock is -8.19% below its SMA20 and -6.53% below its SMA50, but remains 20.74% above its SMA200. The stock has gained 10.85% over the last year.

10. U.S. Bancorp (NYSE:USB): Banking Industry. Market cap of $50.04B. RSI(14) at 34.3. The stock has lost 7.01% over the last year.

11. Wells Fargo & Company (NYSE:WFC): Money Center Banks Industry. Market cap of $161.98B. RSI(14) at 32.19. It's been a rough couple of days for the stock, losing 5.31% over the last week.

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