This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Bad News Sends Stocks To Woodshed

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, 4 Stocks Taken to the Woodshed .

All nine are just below their fair value price with seven of nine undervalued by double-digit percentages.

Even after going to the woodshed we have one stock rated at strong buy, six rated buy and two rated hold.

Four of nine stocks are higher over the past 12 months despite being taken to the woodshed. One is still up 70.2% from a year ago. Five have lost ground by more than double-digit percentages, with one down 34.3%.

All nine are projected to be higher over the next 12 months by 3.7% to 12.4% in an environment expected to be less volatile.

Only one stock has a single-digit trailing 12 month price-to-earnings ratio, while three have P/E above 20.0.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DRI $73.80 -0.15%
FCX $11.04 -1.40%
GPS $35.21 -1.80%
TIF $94.84 0.87%
YUM $88.27 0.51%

Markets

Chart of I:DJI
DOW 17,564.59 -33.61 -0.19%
S&P 500 2,090.86 -7.18 -0.34%
NASDAQ 5,100.9990 -14.3830 -0.28%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs