NEW YORK ( TheStreet) -- Over the past two weeks several companies announced negative news about their businesses and their stocks got hammered in what I describe as being taken to the woodshed. An investor taken by surprise when this happens often becomes like a deer in the headlights wondering what to do.
With a buy-and-trade strategy the first decision an investor needs to make is whether or not the stock-specific negative news is a game changer. Do you wish to continue to own the stock? If the answer is no, simply get out on the old theory that your first loss may be your best loss. If this becomes your decision don't look back as there are thousands of other stocks to choose from.
One reason to stay with a woodshed stock is that www.ValuEngine.com still rates the company with a five-engine strong buy rating, or a four-engine buy rating. Regardless, if your investment decision is to stay with a woodshed stock you must then decide on a price level at which to try and catch the falling knife. This could be weakness the 50-day, 200-day or 200-week simple moving average, or a prior low. With my methodology, it could be a buy on weakness to a value level from my proprietary analytics.
The nine stocks profiled here include an update on the four I profiled a week ago in my post,
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV