Kapitall Strategies: Rebound Candidates to Consider After Today's Meltdown

By
A A A

(List compiled by Eben Esterhuizen, CFA)

Strategy: If a stock is down more than 3% since yesterday's close, buy it, and sell it on the close 10 trading sessions later.

Today was a brutal day for stock market bulls. Some people think we're seeing panic selling, and that stocks could see a short-term bounce from the extreme pessimism.

But which stocks seeing losses today might be good candidates for this strategy?

To help you get ideas, we started with a universe of about 400 stocks that have declined by more than 3% since yesterday's close (i.e. strategy candidates).

We went back in time, and evaluated how many times these stocks rebounded from similar losses over the last quarter.

For each backtested rebound strategy, we'll also report the average return made on the investment (ignoring transaction costs).

Recent history suggests that these stocks are resilient, and may rebound from today's sell-off. That said, it's important to point out that past performance is no guarantee of future results.

In other words, just because these stocks rebounded from similar losses over the last quarter, there is no guarantee that they will do so again today.

As always, use this list only as a starting point for your own analysis.

For each stock listed, we'll also include the annual performance.

Analyze These Ideas (Tools Will Open In A New Window)

1. Access a thorough description of all companies mentioned
2. Compare analyst ratings for all stocks mentioned below
3. Visualize annual returns for all stocks mentioned

1. InterDigital, Inc. (IDCC): Wireless Communications Industry. At time of writing (4:30pm ET), the stock is down 6.53% since yesterday's close. Over the last quarter, there have been 7 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 22.88% over the next 10 trading days. The stock has returned 151.63% over the last year.

2. Walter Investment Management Corp. (WAC): Asset Management Industry. At time of writing (4:30pm ET), the stock is down 5.6% since yesterday's close. Over the last quarter, there have been 2 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 21.17% over the next 10 trading days. The stock has returned 26.06% over the last year.

3. AutoNation Inc. (AN): Auto Dealerships Industry. At time of writing (4:30pm ET), the stock is down 5.81% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 16.92% over the next 10 trading days. The stock has returned 38.81% over the last year.

4. Nike Inc. (NKE): Textile - Apparel Footwear & Accessories Industry. At time of writing (4:30pm ET), the stock is down 6.35% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 13.78% over the next 10 trading days. The stock has returned 11.73% over the last year.

5. SunPower Corporation (SPWRA): Semiconductor - Specialized Industry. At time of writing (4:30pm ET), the stock is down 6.11% since yesterday's close. Over the last quarter, there have been 2 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 13.11% over the next 10 trading days. The stock has returned 34.57% over the last year.

6. Coach Inc. (COH): Textile - Apparel Footwear & Accessories Industry. At time of writing (4:30pm ET), the stock is down 6.19% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 12.43% over the next 10 trading days. The stock has returned 51.95% over the last year.

7. HollyFrontier Corporation Commo (HFC): Oil & Gas Refining & Marketing Industry. At time of writing (4:30pm ET), the stock is down 6.39% since yesterday's close. Over the last quarter, there have been 8 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 12.34% over the next 10 trading days. The stock has returned 149.67% over the last year.

8. Whole Foods Market, Inc. (WFM): Grocery Stores Industry. At time of writing (4:30pm ET), the stock is down 6.01% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 10.36% over the next 10 trading days. The stock has returned 65.67% over the last year.

9. Cabela's Inc. (CAB): Sporting Goods Stores Industry. At time of writing (4:30pm ET), the stock is down 5.75% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 9.62% over the next 10 trading days. The stock has returned 47.25% over the last year.

10. Sensata Technologies Holding NV (ST): Electronic Equipment Industry. At time of writing (4:30pm ET), the stock is down 5.65% since yesterday's close. Over the last quarter, there have been 1 days when the stock lost more than 3% in a session. Trading the above mentioned strategy on those days would have returned an average of 9.5% over the next 10 trading days. The stock has returned 93.52% over the last year.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Investing Ideas , Stocks


Kapitall

Kapitall

More from Kapitall:

Related Videos

Stocks

Referenced

50%
100%
85%
100%
100%

Most Active by Volume

84,725,997
  • $6.69 ▼ 5.11%
68,180,500
  • $3.38 ▼ 1.74%
52,748,572
  • $99.02 ▲ 1.38%
40,996,811
  • $74.92 ▼ 0.36%
37,831,986
  • $15.50 ▼ 0.58%
34,013,720
  • $31.98 ▼ 4.31%
32,417,159
  • $25.59 ▼ 0.78%
31,985,971
  • $54.87 ▲ 1.20%
As of 7/28/2014, 04:05 PM