RE:BUY signal is dark green!!!!!!!!!!!!!!!!!Thinkbigsti69 wrote: Every stock that is bashed without relent should be considered as a strong buy signal. Dead stocks are always ignored by bashers.
Hi Think big
Thanks for bringing this up.
The research suggests exactly the opposite.
Weak companies attract more interest from short sellers and hence "basher s"
Cheers
“Firms with low ratios of fundamentals (such as earning and book values) to market values are known to have systematically lower future stock returns. We document that short-sellers position themselves in the stock of such firms, and then cover their positions as the ratios mean-revert. We also show that short-sellers refine their trading strategies to minimize transactions costs and maximize their investment returns. Our evidence is consistent with short-sellers using information in these ratios to take positions in stocks with lower expected future returns.”
SOME of the data is below
"A large body of evidence demonstrates that ratios of measures of fundamental value to market value systematically predict future stock returns. These ratios compare estimates of “intrinsic” values based on accounting data to observed market prices. They range from simple ratios such as earnings-to-price and book-to-market (e.g., Fama and French, 1995; Lakonishok et al., 1994) to ratios based on more sophisticated valuation models such as Ohlson (1995) (e.g., Frankel and Lee, 1998; Dechow et al., 1999). Given the well-documented predictive ability of these ratios with respect to future stock returns, they provide a natural starting point for investigating the trading strategies of short-sellers."
https://www.sciencedirect.com/science/article/abs/pii/S0304405X01000563