103-26 Find Overpriced Stocks

Screener Strategy 2 – Find over priced stocks

If you want to short an overpriced stock then the following configurations might uncover some possibilities.

  • P/E ratio > 50 – Highly valued companies with high growth potential for the future will have a high P/E.  However, if that growth does not materialize the stocks will tend to come crashing down.  If the company does not have a P/E ratio, this means it might be making a loss. Making a loss is also a good criteria for a stock to short.
  • Earnings Growth 1 year <= 0% – shrinking earnings are something to screen for to enable you to find weakening stocks.
  • Revenue Growth 1 Years <=0% – No growth or negative revenue growth
  • Revenue $ – less dollar revenues that in previous years or quarters
  • High Debt – look for debt to equity ratios of as high as possible.

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