Whenever I see a list of contrarian stock picks, I'm reminded of the Yogi Berra witticism about a popular restaurant: "Nobody goes there anymore because it's too crowded."
A list of stocks to buy because no one is interested in buying them seems paradoxical, but the methods that the Wall Street Journal used to compile its list of contrarian stocks [subscription required] are interesting: Stocks that have lagged the market for six months but have made sizable gains in the past week, have manageable debt levels, solid profits, negative analyst ratings, and PEG ratios below 1.5.
That's a pretty good screen for finding beaten down stocks, and I'm going to try to find a site that will allow me to input all of that into a stock screener. Anyone with any suggestions, please leave a comment.
And to learn more about contrarian investing, I recommend David Dreman's Contrarian Investment Strategies.
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