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Net margin, or net income divided by earnings, is a measure of how well a company is taking profits from its sales. When a company’s cost structure is improved, net margin increases and the company becomes more profitable.

Here we report 20 stocks that are technically oversold, with RSI(14) below 40, yet have seen large increases in net margin over the last five years. These stocks have trailing-twelve-month net margins at least 10% larger than the prior-year’s figure and at least 20% larger than the 5-year average.

Do you think the selling pressure on these stocks is warranted? Use this list as a starting-off point for your own analysis.

List sorted by TTM net margin.

1. Prospect Capital Corporation (NASDAQ:PSEC): Asset Management Industry. Market cap of $990.96M. RSI(14) at 25.03. TTM net margin at 74.38% vs. 5-year average of 31.68%. The stock is a short squeeze candidate, with a short float at 7.82% (equivalent to 5.48 days of average volume). The stock is currently stuck in a downtrend, trading 8.66% below its SMA20, 10.98% below its SMA50, and 5.12% below its SMA200. It's been a rough couple of days for the stock, losing 6.61% over the last week.



2. AbitibiBowater Inc. Common Stoc (ABH):
Paper & Paper Products Industry. Market cap of $2.15B. RSI(14) at 34.09. TTM net margin at 68.54% vs. 5-year average of -5.83%. The stock is a short squeeze candidate, with a short float at 6.94% (equivalent to 8.92 days of average volume). The stock is currently stuck in a downtrend, trading 6.17% below its SMA20, 12.53% below its SMA50, and 16.19% below its SMA200.

3. Conceptus, Inc. (NASDAQ:CPTS): Medical Instruments & Supplies Industry. Market cap of $349.02M. RSI(14) at 21.39. TTM net margin at 60.81% vs. 5-year average of 10.99%. The stock is a short squeeze candidate, with a short float at 8.6% (equivalent to 11.01 days of average volume). The stock is currently stuck in a downtrend, trading 11.88% below its SMA20, 18.96% below its SMA50, and 21.79% below its SMA200. It's been a rough couple of days for the stock, losing 7.14% over the last week.



4. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN): Biotechnology Industry. Market cap of $2.85B. RSI(14) at 39.59. TTM net margin at 49.98% vs. 5-year average of 15.94%. The stock is a short squeeze candidate, with a short float at 8.15% (equivalent to 12.05 days of average volume). The stock has gained 30.29% over the last year.

5. HEALTHSOUTH Corp. (NYSE:HLS): Specialized Health Services Industry. Market cap of $2.41B. RSI(14) at 38.98. TTM net margin at 47.11% vs. 5-year average of 11.45%. The stock is a short squeeze candidate, with a short float at 9.06% (equivalent to 10.35 days of average volume). After a solid performance over the last year, HLS has pulled back during recent sessions. The stock has gained 32.32% over the last year.

6. Rubicon Technology, Inc. (NASDAQ:RBCN): Semiconductor Industry. Market cap of $385.46M. RSI(14) at 20.65. TTM net margin at 44.93% vs. 5-year average of 7.14%. The stock is a short squeeze candidate, with a short float at 38.82% (equivalent to 11.74 days of average volume). It's been a rough couple of days for the stock, losing 11.01% over the last week.

7. CAI International Inc. (NYSE:CAP):
Rental & Leasing Services Industry. Market cap of $400.09M. RSI(14) at 39.69. TTM net margin at 42.18% vs. 5-year average of 14.05%. The stock has gained 56.57% over the last year.

8. Thompson Creek Metals Company Inc. (NYSE:TC):
Industrial Metals & Minerals Industry. Market cap of $1.63B. RSI(14) at 36.78. TTM net margin at 35.85% vs. 5-year average of 11.49%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.98). The stock has lost 2.7% over the last year.

9. IMAX Corporation (NYSE:IMAX): Photographic Equipment & Supplies Industry. Market cap of $1.93B. RSI(14) at 34.98. TTM net margin at 33.54% vs. 5-year average of 3.28%. After a solid performance over the last year, IMAX has pulled back during recent sessions. The stock is 11.48% below its SMA20 and 12.3% below its SMA50, but remains 10.48% above its SMA200. The stock has performed poorly over the last month, losing 15.57%.

10. Crown Media Holdings Inc. (NASDAQ:CRWN): CATV Systems Industry. Market cap of $615.05M. RSI(14) at 39.3. TTM net margin at 30.94% vs. 5-year average of -45.73%. The stock is a short squeeze candidate, with a short float at 13.59% (equivalent to 33.83 days of average volume). The stock has performed poorly over the last month, losing 11.4%.

11. Barrick Gold Corporation (NYSE:ABX): Gold Industry. Market cap of $44.73B. RSI(14) at 36.56. TTM net margin at 30.15% vs. 5-year average of 5.72%. The stock has gained 1.04% over the last year.

12. Artio Global Investors Inc. (NYSE:ART): Asset Management Industry. Market cap of $689.34M. RSI(14) at 14.34. TTM net margin at 29.08% vs. 5-year average of -4.94%. The stock might be undervalued at current levels, with a PEG ratio at 0.66, and P/FCF ratio at 9.44. The stock is a short squeeze candidate, with a short float at 8.55% (equivalent to 11.03 days of average volume).

13. Teradyne Inc. (NYSE:TER):
Semiconductor Equipment & Materials Industry. Market cap of $2.63B. RSI(14) at 36.44. TTM net margin at 24.01% vs. 5-year average of 2.18%. The stock is a short squeeze candidate, with a short float at 12.47% (equivalent to 5.97 days of average volume). The stock has gained 25.71% over the last year.

14. UBS AG (NYSE:UBS): Foreign Money Center Banks Industry. Market cap of $35.89B. RSI(14) at 34.76. TTM net margin at 23.60% vs. 5-year average of -6.59%. The stock has gained 27.83% over the last year.

15. Micron Technology Inc. (NASDAQ:MU):
Semiconductor Industry. Market cap of $8.18B. RSI(14) at 32.68. TTM net margin at 18.03% vs. 5-year average of -4.53%. The stock is currently stuck in a downtrend, trading 6.06% below its SMA20, 16.91% below its SMA50, and 10.27% below its SMA200. The stock has performed poorly over the last month, losing 15.86%.

16. Optimer Pharmaceuticals, Inc. (NASDAQ:OPTR): Biotechnology Industry. Market cap of $582.62M. RSI(14) at 39.25. TTM net margin at 14.19% vs. 5-year average of -3617.51%. The stock has performed poorly over the last month, losing 10.21%.

17. Vishay Intertechnology Inc. (NYSE:VSH): Semiconductor Industry. Market cap of $2.37B. RSI(14) at 39.98. TTM net margin at 14.04% vs. 5-year average of -8.62%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.17). The stock is a short squeeze candidate, with a short float at 10.98% (equivalent to 6.38 days of average volume).

18. Brooks Automation Inc. (NASDAQ:BRKS):
Semiconductor Equipment & Materials Industry. Market cap of $681.35M. RSI(14) at 39.56. TTM net margin at 12.67% vs. 5-year average of -12.35%. The stock has gained 26.54% over the last year.

19. Finisar Corp. (NASDAQ:FNSR): Networking & Communication Devices Industry. Market cap of $1.41B. RSI(14) at 32.52. TTM net margin at 9.57% vs. 5-year average of -17.36%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.97). The stock is currently stuck in a downtrend, trading 16.09% below its SMA20, 29.14% below its SMA50, and 35.49% below its SMA200. It's been a rough couple of days for the stock, losing 11.11% over the last week.

20. Clean Energy Fuels Corp. (NASDAQ:CLNE):
Gas Utilities Industry. Market cap of $884.37M. RSI(14) at 39.43. TTM net margin at 5.09% vs. 5-year average of -24.68%. The stock is a short squeeze candidate, with a short float at 26.74% (equivalent to 6.62 days of average volume). The stock has lost 22.2% over the last year.

*Net margin data sourced from Screener.co, 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: 20 Oversold Stocks With Impressive Net Margin Growth