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TheStreet Open House

Oversold and Unloved Can Spell Trading Profits

Navistar (NAV)

Background: Navistar, through its subsidiaries, manufactures and sells commercial and military trucks, buses, diesel engines, and recreational vehicles, as well as provides service parts for trucks and trailers worldwide. The company operates in four segments, truck, engine, parts and financial services.

52 Week Range: $18.17 to $48.18

Navistar is oversold on the weekly chart, but in the last month, the stock is up 7.8%. As a result, I want to see a pullback under $23 before entering long. $22.75 is my target entry price to get long.

Analysts are not overly bullish. Only five out of 18 rate the company a buy, while the majority rate it a hold and three recommend selling. It's understandable why analysts are not calling for investors to back up the truck; the shares are down 42% in the last year (ouch).

They have to be down to reach my criteria of oversold status though, and others' pain may be your portfolio's gain. The average analyst target price for Navistar International is $26.92. My 12 month price target is $28.50 at this time.

The short interest is anything, but short. The number of shares shorted is markedly elevated and should be treated as warning that shorts anticipate upcoming price weakness. The current float short is 23.3%.

EXC Revenue Quarterly Chart
EXC Revenue Quarterly
data by YCharts

Exelon (EXC)

Background: Exelon subsidiaries are engaged principally in the production, purchase, transmission, distribution and sale of electricity to residential, commercial, industrial and wholesale customers and the distribution and sale of natural gas to residential, commercial and industrial customers.

52 Week Range: $28.40 to $41.75

Price To Book: 1.2

The good news is the company currently pays $2.10 per share in dividends for a yield of 6.9%. The bad news is that fears of a dividend cut are contributing to the sell-off. One possible solution is to use options as the means to gain exposure.

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