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Earnings season is a great time to watch for stocks that decline after a company reports earnings or guidance that disappoints investors. Many stocks see exaggerated drops in their share price if a company "misses" earnings expectations by even a couple of pennies. Other times the earnings meet expectations, but if the company gives guidance that looks weak, it also often results in an exaggerated sell off in the stock. The reason I look for these opportunities is because stocks that are oversold often rebound quickly, sometimes in just days and this can create quick profits for traders or solid entry points for longer term investors. With earnings season in full swing, there are stocks getting major haircuts everyday for what might be just a short term earnings miss, so opportunities abound. All of the stocks below recently reported earnings and/or guidance that caused the shares to drop substantially. These stocks could rebound in the coming days and weeks:

Transocean (NYSE:RIG) shares are trading at $50.12. Transocean is a global offshore drilling company. These shares have traded in a range between $43.15 to $85.98 in the last 52 weeks. The 50-day moving average is $53.07 and the 200-day moving average is $65.42. Earnings estimates indicate a profit of $3.34 per share for 2011, and $5.55 for 2012. The dividend is $3.16 per share which yields 5.6%. RIG shares dropped significantly due to their involvement in the oil spill in the Gulf of Mexico, and have also dropped as the stock market corrected. Just recently the stock dropped from about $60 down to around $49, after RIG released earnings that disappointed most investors. The earnings miss is a short-term disappointment, but the future for oil and Transocean is still bright, so it makes sense to buy this and any future dips in the stock.

Central European Distribution Corp. (NASDAQ:CEDC) shares are trading at $3.21. CEDC is a leading beverage distribution company, based in Pennsylvania. The 50-day moving average is $6.52 and the 200-day moving average is $11.22. Earnings estimates for CEDC are 60 cents per share in 2011, and 86 cents for 2012. The 52 week range is $3.15 to $28.08. CEDC shares dropped nearly 40% when earnings were released, but it seems to be a clear overreaction based on emotions and forced margin call selling. The company decided to take a non-cash write down on goodwill and earnings estimates were lowered for 2011. However, there is a good chance for long term investors to make money from these levels, especially since the stock appears to be dirt cheap and the company could be preparing itself for sale. This company has long been rumoured to be a takeover target and just recently a major investor took a large stake in this company. Shortly thereafter, CEDC management adopted a poison pill agreement in order to make a hostile takeover more difficult. However, with the stock trading this low, I won't be surprised if a hostile or friendly deal arises. This stock is volatile and great for traders as it makes big up and down moves. I just bought back into this stock because the upside is too compelling in the low $3 range and the upside is very significant. It makes sense to buy at current levels and add on any dips to average in.

Dendreon Corporation (NASDAQ:DNDN) is trading around $6.69. Dendreon is a biotechnology company, based in Washington. These shares have traded in a range between $6.46 to $43.96 in the last 52 weeks. The 50-day moving average is $10.28 and the 200-day moving average is $28.65. This stock dropped off a cliff for the second time this year when Dendreon announced financial results which indicated slower than expected sales for Provenge. While revenues are not as high as expected, it is still early and the company has begun to reduce expenses. This stock looks oversold and could be a good candidate for a short term rebound trade.

MGM Resorts (NYSE:MGM) shares are now trading at $10.92. MGM is a leading casino and resort company, based in Las Vegas. These shares have traded in a range between $7.40 to $16.94 in the last 52 weeks. The 50-day moving average is $10.41 and the 200-day moving average is $12.83. Earnings estimates for MGM are for a loss of about 46 cents per share in 2011 and a loss of about 33 cents for 2012. MGM shares dropped from about $12 down to around $10.40 after earnings were released. MGM is a long term turnaround play and has been a good stock to buy on dips.

MEMC Electronic Materials (WFR) is trading at $5.19. MEMC is a maker of silicon wafers for semiconductor and solar use. These shares have a 52 week range of $4.58 and $15.04. The 50-day moving average is $6.13 and the 200-day moving average is $9.31. Estimates for WFR are about 81 cents per share in 2011, and $1.02 for 2012. MEMC was trading for about $6.50 before earnings and dropped around 20%. Pricing and demand for silicon wafers has been weak and this has impacted earnings and guidance for MEMC. I would only use dips in this stock as a short term opportunity and sell on rallies.

Abercrombie & Fitch (NYSE:ANF) shares are trading at $58.21. Abercrombie is a specialty clothing retailer. The shares have traded in a range between $44.31 to $78.25 in the past 52 weeks. The 50-day moving average is $66.51 and the 200-day moving average is $65.16. Earnings estimates for ANF are $3.22 per share in 2011, and $4.67 for 2012. ANF shares were trading around $75 but dropped substantially after earnings were released. Investors seemed to be disappointed that sales in Europe were coming in weak. That trend could take time to play out, but the company is well managed and the stock is likely to see some type of bounce soon.

Kellogg Company (NYSE:K) shares are trading at $49.91. Kellogg is a leading maker of cereals, cookies, crackers and other foods. These shares have traded in a range between $48.51 to $57.70 in the last 52 weeks. The 50-day moving average is $53.63 and the 200-day moving average is $53.94. Earnings estimates indicate a profit of $3.34 per share for 2011, and $5.55 for 2012. The dividend is $1.72 per share which yields 3.2%. Just recently, the stock dropped from about $55 down to around $49, after Kellogg released earnings that disappointed most investors. Profits were down about 14% in the 3rd quarter partially due to rising commodity costs. It's probably a little early to buy but on a further dip to about $45 per share or less, this starts to look cheap.

The data is sourced from Yahoo Finance. The information and data is believed to be accurate, but no guarantees or representations are made. Rougemont is not a registered investment advisor and does not provide specific investment advice. The information contained herein is for informational purposes.

Source: 7 Stocks You Can Buy Cheap Thanks To Bad Earnings