10 Oversold Stocks With Strong Profitability

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Includes: ASIA, CAVM, DRYS, FFIV, IMAX, ITMN, KWK, MDSO, SMI, TSU
by: Follow My Alpha

The market is crushing sectors and industries without discrimination. Still, not all companies are feeling the same level of pain. At this point some names are starting to look potentially oversold. In our view it's tough to justify drops in value ranging from 30-50% in just one month and there could now be nuggets of gold waiting to be found.

A sound net margin is a profitability ratio that helps investors get a better idea about which companies can tread water more easily in a tough economy than others.A company with a strong bottom line margin can often hold a certain base level of profitability without nearing the red. As well, companies with sound and/or widening net margins are often rewarded with rising stocks prices due to increased profitability.

We ran a screen for companies that were crushed in the last month (X=<-30%). From this pool we screened out companies that held healthy net margins (X>=15%). We did not screen out any sectors or industries. The list is ranked from worst to least worst by stock performance.

Tim Holding Company (TSU)

Sector

Communication Services

Industry

Telecom Services

Market Cap

$ 6,311M

Beta

0.89

Analyst Sentiment

11/14 – List Buy/ Outperform (Bullish)

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The company operates within Brazil and provides mobile telecommunications services. The firm has fallen 48.89%. The firm’s net margin (ttm) is 476.68%.

Imax Corporation (IMAX)

Sector

Consumer Cycle

Industry

Media - Diversified

Market Cap

$ 1,026M

Beta

2.10

Analyst Sentiment

12/18 – List Buy/ Outperform (Bullish)

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The company offers entertainment technology relative to film based motion pictures. The firm has fallen 44.09%. The firm’s net margin is 27.72% (ttm). The short interest for the firm is 11.10%. Given the short number, this company may be a short favorite or potentially a great short squeeze.

InterMune, Inc. (ITMN)

Sector

Healthcare

Industry

Biotechnology

Market Cap

$ 264M

Beta

2.45

Analyst Sentiment

12/15– List Buy/ Outperform (Bullish)

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The company develops and sells hepatology and pulmonology therapies. The firm has fallen 43.39%. The firm’s net margin is 47.91% (ttm). The short interest for the firm is 9.90%%.

Semiconductor Manufacturing (SMI)

Sector

Technology

Industry

Semiconductors

Market Cap

$ 1,249M

Beta

1.71

Analyst Sentiment

5/12 – List Hold/Neutral (Slightly Bearish)

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The company offers semiconductor fabrication services. The firm has fallen 41.84%. The firm’s net margin is 16.21% (ttm).

DryShips, Inc. (DRYS)

Sector

Industrials

Industry

Shipping & Ports

Market Cap

$ 961M

Beta

3.38

Analyst Sentiment

10/14 List Buy/Outperform (Bullish)

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The company owns and operates a fleet of dry bulk ships.The firm has fallen 40.34%. The firm’s net margin is 21.31% (ttm). The short interest for the firm is 17.30%. Given the short number, this company may be a short favorite or potentially a great short squeeze.

Cavium (CAVM)

Sector

Technology

Industry

Semiconductors

Market Cap

$ 1,335M

Beta

1.21

Analyst Sentiment

18/28 – List Buy/Outperform (Bullish)

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The company sells highly integrated semiconductor processors that involve security applications and more. The firm has fallen 38.40%. The firm’s net margin is 17.19% (ttm). The short interest for the firm is 11.60%. Given the short number, this company may be a short favorite or potentially a great short squeeze.

Medidata Solutions, Inc. (MDSO)

Sector

Technology

Industry

Software - Application

Market Cap

$ 375M

Beta

0.27

Analyst Sentiment

4/7 – List Buy/Outperform (Bullish)

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The company sell software-as-a-service (SaaS) relative to clinical technology solutions.The firm has fallen 37.70%. The firm’s net margin is 17.37% (ttm). The short interest for the firm is 7.50%.

F5 Networks (NASDAQ:FFIV)

Sector

Technology

Industry

Software - Application

Market Cap

$ 5,887M

Beta

1.03

Analyst Sentiment

22/37 – List Buy/Outperform (Bullish)

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The firm has fallen -37.36%. The firm’s net margin is 20.34% (ttm). The short interest for the firm is 3.60%.

Asiainfo-Linkage, Inc. (ASIA)

Sector

Technology

Industry

Software - Application

Market Cap

$ 747M

Beta

0.69

Analyst Sentiment

13/16 – List Buy / Outperform (Bullish)

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The company operates in China and offers along IT security products with telecom software solutions. The firm has fallen 37.26%. The firm’s net margin is 18.17% (ttm). The short interest for the firm is 26.50%.

Quicksilver Resources, Inc. (KWK)

Sector

Energy

Industry

Oil & Gas E&P

Market Cap

$ 1,525M

Beta

1.97

Analyst Sentiment

13/23 – List Hold / Neutral (Neutral)

Click to enlarge

The company develops and produces natural crude oil, gas liquids, and natural gas. The firm has fallen 36.99%. The firm’s net margin is 40.28%. The short interest for the firm is 21.00%.

We hope this helps investors as they do their own due diligence on companies that are getting pummeled by the markets but still hold strong bottom line margins.

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