I regularly look at "oversold" stocks, as their prices can often represent good entries. At this time of year, with tax-loss selling and certain window-dressing activities in effect, it can be a particularly good use of time. With that in mind, I quickly screened the S&P 500 to find the 20 most oversold names.
Before I go on, I want to share my definition of oversold, with the caveat that there is no one correct way conceptually to define it. The system I use was invented by StockVal, which was acquired by ThomsonReuters a few years ago. The basic math is to evaluate the current price compared to a long-term moving average in the context of the volatility of the stock over the past five years. The output on this price momentum indicator can be thought of in terms of standard deviations from the norm. The 20 most oversold names ranged from -1.59 to -2.84. Without going into the exact scores for each name, here is the list of companies:
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