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Zacks.com featured expert Kevin Matras highlights: Cooper Industries, Ltd., Cabot Oil & Gas Corp., Deere & Company, Potlatch Corp. and RBC Bearings.

February 24, 2009 | Comments: 0
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CBE | COG | DE | PCH | ROLL
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Chicago, IL – February 24, 2009- Kevin Matras explains how to find the best stocks to short. Stocks in this week’s article include Cooper Industries, Ltd. (CBE - Snapshot Report), Cabot Oil & Gas Corp. (COG - Analyst Report), Deere & Company (DE - Analyst Report), Potlatch Corp. (PCH - Snapshot Report) and RBC Bearings, Inc. (ROLL - Snapshot Report). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=109

Screen of the Week written by Kevin Matras of Zacks Investment Research:

With the market in a downtrend, one of the best ways to make money has been on the short side.

One of my favorite things lately has been to find companies with earnings that are projected to be lower than last year AND earnings for next year that are projected to be lower than this year.

Seems simple enough, but you'd be surprised at how many companies are projected down this year but up the next. (Of course, expecting to be up and actually being up are two totally different things.)

But finding those companies whose 'recoveries' are in the more distant future make these companies (in my opinion) last on the list to buy once we hit bottom. They are also some of the best candidates to short until then (and even beyond).

One of the reasons I like this concept is because most analysts seem to take a pretty optimistic view in the future.

Maybe it's human nature.

I secretly call this the Chicago Cubs effect. (I guess it’s no secret now.) What's the old adage after the Cubs blow it every year? "Wait 'til next year."

(I'm allowed to say this as I'm a Cubs fan. And Sox for that matter.)

But the future is always brighter, or so it seems.

But what if these analysts get even more sour on the companies’ prospects? Not a good sign.

And if you still believe the views are a bit optimistic, then there's likely even more pain in store than what's forecast.

So in this week's screen, we're screening for:

  • This Year's Projected EPS < Last Year's Actual EPS
    (F1 < F0) (Estimate if not reported yet)
  • Next Year's Projected EPS < This Year's Projected EPS
    (F2 < F1) (There's the Cubs effect – "wait 'til next year" – not.)
  • Zacks Rank >= 4
    (Which means Sells and Strong Sells)
  • % Change in F1 Est. over 12 weeks < 0
    (This year's earnings estimates being revised down.)
  • % Change in F2 Est. over 12 weeks < 0
    (Next year's earnings estimates are being revised down also.)
  • Current Price >= 10
  • Volume (Avg. 20 Days Shares) >= 100,000

Here are a few stocks from this week's screen (2/24/09):

CBE - Snapshot Report Cooper Industries, Ltd.
COG - Analyst Report Cabot Oil & Gas Corp.
DE - Analyst Report Deere & Company
PCH - Snapshot Report Potlatch Corp.
ROLL - Snapshot Report RBC Bearings, Inc.

Get the rest of the stocks on this list and start looking for these kinds of companies on your own. But remember, the market won't go down forever. So start planning your buying strategy now to be ready for when the market finally does turn around. You can do it. Sign up for a free trial to the Research Wizard today and start putting your plan together right now: http://at.zacks.com/?id=111

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=112

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros http://at.zacks.com/?id=113

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.co m/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: www.Zacks.com


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Market Summary Nov 25, 2009 01:07 am ET
DJIA 10433.71  -17.24 -0.16%
NASD 2169.18  0.00 0.00%
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