UNDERVALUED AND OVERSOLD STOCKS! GET THEM WHILE THEY'RE STILL CHEAP!
In both bullish and bearish markets, one can find stocks with good growth potential. The key is in selecting them according to pertinent measures of valuation. In other words, screen to find what screaming Jim Cramer would call "forgotten, forlorn, and undiscovered stocks." Like a foxy debutant, they will be stars someday, yet no one dances with them now.
Useful criteria are measures such as a stock's debt to equity, price to sales, price to book, and PEG ratios. All of those should be lower than their peers. These are companies worth something that just aren't priced accordingly. In addition, the insiders should own a substantial amount of company stock.
A simplified valuation formula can be applied to daily stock data to show which stocks have a very strong potential for upward price movement:
Stocks that pass the initial screening should then be investigated in detail prior to purchase, and the ones without improving fundamentals eliminated from further consideration. Go with the rising stars.
Stocks with excellent breakout potential: