Oversold Stock Idea?

[RogueKoiFish]

Hi everyone. A newbie question. Some of the basics were to look for stocks that are oversold so ideally RSI around 30 or less and trending upwards on the monthly charts with the market trending upwards. I know that is not a guarantee but thought it would be a good start for filtering out stocks. Also didn't want any companies with market capital of $2 Billion or less figure that might be too risky and could go bankrupt.

I found a few and interested in hearing any opinion on these stocks that are oversold:
Carvana
Netflix
Lyft
PayPal
Coinbase
Boeing
Shopify

Be interested in hearing some thoughts about these stocks.

[Yodean]

Hi everyone. A newbie question. Some of the basics were to look for stocks that are oversold so ideally RSI around 30 or less and trending upwards on the monthly charts with the market trending upwards. I know that is not a guarantee but thought it would be a good start for filtering out stocks. Also didn't want any companies with market capital of $2 Billion or less figure that might be too risky and could go bankrupt.

I found a few and interested in hearing any opinion on these stocks that are oversold:
Carvana
Netflix
Lyft
PayPal
Coinbase
Boeing
Shopify

Be interested in hearing some thoughts about these stocks.

Lol, I have COIN (big position) and SHOP (tiny position). If you have a 2 to 3 year time frame, the asymmetry for outsized gains is really good, imo, at current valuations.

Of course, I could still be saying this in 2 to 3 years ...

nfa!

[SOL]

Hi everyone. A newbie question. Some of the basics were to look for stocks that are oversold so ideally RSI around 30 or less and trending upwards on the monthly charts with the market trending upwards. I know that is not a guarantee but thought it would be a good start for filtering out stocks. Also didn't want any companies with market capital of $2 Billion or less figure that might be too risky and could go bankrupt.

I found a few and interested in hearing any opinion on these stocks that are oversold:
Carvana
Netflix
Lyft
PayPal
Coinbase
Boeing
Shopify

Be interested in hearing some thoughts about these stocks.

Here is a simple strategy look for oversold stocks with low PE's or dropping price to sales ratio. I think the P/S ratio is superior to P/E but an even better bet would be to find a stock that has low scores on both metrics.
The stock should also be trading in the oversold conditions on the monthly charts and the trend should be positive. If you want an almost perfect setup the stock should be in an industry that has plenty of room to expand or its in the top 10 in its industry


Looking quickly at your list PYPL and COIN would make the cut though COIN Is like playing with gasoline, its highly volatile and PYPL while less volatile than COIN is still quite volatile relative to your average stock.

[RogueKoiFish]

Sol

After looking at your extra criteria of increasing P/E and increasing P/S and top 10 in each sector found the following extra ones:

NFLX
SNAP
DIS
WBD
FB
SBUX
CSGP

I like the Paypal idea and Coinbase (for higher risk/higher profit Opportunity).
Had to recheck that the monthly was trending upwards and these are the ones that are left.
Be interested in your opinion of these ones.

[SOL]

Sol

After looking at your extra criteria of increasing P/E and increasing P/S and top 10 in each sector found the following extra ones:

NFLX
SNAP
DIS
WBD
FB
SBUX
CSGP

I like the Paypal idea and Coinbase (for higher risk/higher profit Opportunity).
Had to recheck that the monthly was trending upwards and these are the ones that are left.
Be interested in your opinion of these ones.

You mean decreasing P/E and P/S. Both metrics should continue dropping as it indicates that the company is growing and earning more

[RogueKoiFish]

Whoops I didn't understand P/E and P/S my mistake. You are correct Sol. Decreasing P/E and decreasing P/S is good.

For the beginners like me:
P/E = Current stock price/ earning per share

So higher earnings are good which decreases the P/E ratio

P/S = Total market cap/ 12 month sales
So again high 12 month sales means a smaller P/S ratio

I need to read the definitions first before responding. I didn't use P/E or P/S ratios before in any of my analysis. My main background is 401K funds which is just buy and hold until you retire. So that has done well but would like to better than the 401K.

Appreciate your help. Insightful as always.

[SOL]

Whoops I didn't understand P/E and P/S my mistake. You are correct Sol. Decreasing P/E and decreasing P/S is good.

For the beginners like me:
P/E = Current stock price/ earning per share

So higher earnings are good which decreases the P/E ratio

P/S = Total market cap/ 12 month sales
So again high 12 month sales means a smaller P/S ratio

I need to read the definitions first before responding. I didn't use P/E or P/S ratios before in any of my analysis. My main background is 401K funds which is just buy and hold until you retire. So that has done well but would like to better than the 401K.

Appreciate your help. Insightful as always.

I am not much of a Fundamentals person but there are some data points that when combined with TA can provide one with an edge. Another two points are insider activity and short interest, with short interest, a larger number is generally better as it indicates too many people are shorting the stock. However, all this data should be used against the main backdrop; all the stocks should all be trading in the oversold ranges on the monthly charts. The deeper into the oversold range the better

[harryg]

Whoops I didn't understand P/E and P/S my mistake. You are correct Sol. Decreasing P/E and decreasing P/S is good.

For the beginners like me:
P/E = Current stock price/ earning per share

So higher earnings are good which decreases the P/E ratio

P/S = Total market cap/ 12 month sales
So again high 12 month sales means a smaller P/S ratio

I need to read the definitions first before responding. I didn't use P/E or P/S ratios before in any of my analysis. My main background is 401K funds which is just buy and hold until you retire. So that has done well but would like to better than the 401K.

Appreciate your help. Insightful as always.

The thing to understand about these numbers (P/E, PEG etc) is that they are ratios.

As you say, normally we consider that the P/E goes 'down' when the E goes up. But it also goes down when the P goes down and the E doesn't go up. And so on. So you need, in a basic sense, to grasp what the ratio is telling you and why.

Then you have forward P/E, which is a guess of what the P/E ratio will be in future. For high flying stocks this is usually lower than it is now.

And you have the comparison of the P/E of your share with the average P/E of the market. That's a quick'n'dirty value indicator.

I don't spend too much time on it, since 'expensive' things can get more expensive and 'inexpensive' ones more inexpensive, but I do wake up a bit at extremes (eg 5 or 100).

[Yodean]

Sol

After looking at your extra criteria of increasing P/E and increasing P/S and top 10 in each sector found the following extra ones:

NFLX
SNAP
DIS
WBD
FB
SBUX
CSGP

FWIW, from the list above, I have a large position in FB and a medium-sized one in SNAP.

[RogueKoiFish]

Yodean,

Good choices SNAP and FB.

Two more stocks caught my interest
BA Boeing RSI 32.4
TDOC RSI 30.8 with 17% shorted if I read that correctly.

TDOC seems like it might be heavily shorted but had ARK and Vanguard buy into around March 31,2022 and they are still holding.

I'm happy that I'm just starting to see how the stocks are getting picked. Its still a long journey but opening my eyes to all the stocks that I have missed in the past and focused on the wrong metrics to pick other ones.

[Yodean]

Yodean,

Good choices SNAP and FB.

Two more stocks caught my interest
BA Boeing RSI 32.4
TDOC RSI 30.8 with 17% shorted if I read that correctly.

TDOC seems like it might be heavily shorted but had ARK and Vanguard buy into around March 31,2022 and they are still holding.

I'm happy that I'm just starting to see how the stocks are getting picked. Its still a long journey but opening my eyes to all the stocks that I have missed in the past and focused on the wrong metrics to pick other ones.

Another possible consideration is that right now, with a fair amount of uneasiness out there, to say the least, the companies that aren't showing a lot of earnings/profits are getting hammered, as you may have noticed.

Some of these companies are pretty bad, but some really good ones - the ones who are investing most of their money and profits back into their business and growing their customer and subscriber base - are also getting smashed.

The challenge, if you believe that we are headed towards a digital world, is to find those good growth companies that are doing all the right things, and have declined anywhere from 60% to 90% from their ATHs in a very short time, and accumulate. These companies will likely 5x to 10x in the next 2 - 3 years.

This is where the TIT comes in ...