Stocks become oversold for many reasons, but the basic reason that I care about as a trend follower is that there were more sellers than buyers. Sure, this is simplistic, but why make trading any more difficult than it has to be?
Once a stock becomes oversold, I try to identify when buyers are moving back into the stock for a possible oversold bounce.
One way to identify an oversold stock is to follow the relative strength index once it gets near or below 30. Another way is to look for a stock that's had an extended downtrend.
Traders have to remember that oversold can always become more oversold.
That's why it's important to follow the price action and look for oversold stocks that have a probability--not a guarantee--of changing their trend and potentially spiking higher off depressed levels.
These types of trades can yield big gains quickly, but remember that the price action is more important than the simple fact the stock is extremely oversold.
Attached you find the results of 10 oversold dividend stocks from my research screen...
Cal-Maine Foods -- Yield: 5.65%
Cal-Maine Foods (NASDAQ:CALM) employs 2,872 people, generates revenue of $1,576.13 million and has a net income of $162.28 million. The current market capitalization stands at $2.40 billion.Cal-Maine Foods Incorporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $275.54 million. The EBITDA margin is 17.48% (the operating margin is 14.93% and the net profit margin 10.30%).
Financials: The total debt represents 5.48% of Cal-Maine Foods assets and the total debt in relation to the equity amounts to 7.23%. Due to the financial situation, a return on equity of 24.86% was realized by Cal-Maine Foods Incorporation.
Twelve trailing months earnings per share reached a value of $7.49. Last fiscal year, Cal-Maine Foods Incorporation paid $1.11 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 6.71, the P/S ratio is 1.55 and the P/B ratio is finally 3.46. The dividend yield amounts to 5.65%.
Stock Charts:
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| Long-Term Stock Price Chart of Cal-Maine Foods Incorporation (CALM) |
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| Long-Term Dividend Payment History of Cal-Maine Foods Incorporation (CALM) |
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| Long-Term Dividend Yield History of Cal-Maine Foods Incorporation (CALM) |
Quality Systems -- Yield: 4.82%
Quality Systems (NASDAQ:QSII) employs 2,915 people, generates revenue of $490.22 million and has a net income of $27.33 million. The current market capitalization stands at $882.25 million.Quality Systems’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $58.10 million. The EBITDA margin is 11.85% (the operating margin is 7.33% and the net profit margin 5.58%).
Financials: The total debt represents 0.00% of Quality Systems assets and the total debt in relation to the equity amounts to 0.00%. Due to the financial situation, a return on equity of 9.45% was realized by Quality Systems.
Twelve trailing months earnings per share reached a value of $0.54. Last fiscal year, Quality Systems paid $0.70 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.10, the P/S ratio is 1.80 and the P/B ratio is finally 3.09. The dividend yield amounts to 4.82%.
Stock Charts:
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| Long-Term Stock Price Chart of Quality Systems (QSII) |
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| Long-Term Dividend Payment History of Quality Systems (QSII) |
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| Long-Term Dividend Yield History of Quality Systems (QSII) |
Valero Energy -- Yield: 3.88%
Valero Energy (NYSE:VLO) employs 10,103 people, generates revenue of $87,804.00 million and has a net income of $4,101.00 million. The current market capitalization stands at $29.29 billion.Valero Energy’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8,671.00 million. The EBITDA margin is 9.88% (the operating margin is 7.24% and the net profit margin 4.67%).
Financials: The total debt represents 16.64% of Valero Energy assets and the total debt in relation to the equity amounts to 35.94%. Due to the financial situation, a return on equity of 19.35% was realized by Valero Energy.
Twelve trailing months earnings per share reached a value of $7.90. Last fiscal year, Valero Energy paid $1.70 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 7.82, the P/S ratio is 0.33 and the P/B ratio is finally 1.42. The dividend yield amounts to 3.88%.
Stock Charts:
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| Long-Term Stock Price Chart of Valero Energy (VLO) |
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| Long-Term Dividend Payment History of Valero Energy (VLO) |
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| Long-Term Dividend Yield History of Valero Energy (VLO) |
Gap -- Yield: 3.85%
Gap (NYSE:GPS) employs 141,000 people, generates revenue of $15,797.00 million and has a net income of $920.00 million. The current market capitalization stands at $9.28 billion.Gap’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,154.00 million. The EBITDA margin is 13.64% (the operating margin is 9.65% and the net profit margin 5.82%).
Financials: The total debt represents 23.16% of Gap assets and the total debt in relation to the equity amounts to 68.02%. Due to the financial situation, a return on equity of 33.29% was realized by Gap.
Twelve trailing months earnings per share reached a value of $2.23. Last fiscal year, Gap paid $0.92 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 10.73, the P/S ratio is 0.60 and the P/B ratio is finally 3.72. The dividend yield amounts to 3.85%.
Stock Charts:
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| Long-Term Stock Price Chart of Gap (GPS) |
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| Long-Term Dividend Payment History of Gap (GPS) |
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| Long-Term Dividend Yield History of Gap (GPS) |
Intel Corporation -- Yield: 3.31%
Intel Corporation (NASDAQ:INTC) employs 107,300 people, generates revenue of $55,355.00 million and has a net income of $11,420.00 million. The current market capitalization stands at $146.96 billion.Intel Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $23,067.00 million. The EBITDA margin is 41.67% (the operating margin is 25.68% and the net profit margin 20.63%).
Financials: The total debt represents 22.34% of Intel Corporation assets and the total debt in relation to the equity amounts to 37.11%. Due to the financial situation, a return on equity of 19.53% was realized by Intel Corporation.
Twelve trailing months earnings per share reached a value of $2.35. Last fiscal year, Intel Corporation paid $0.96 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.36, the P/S ratio is 2.68 and the P/B ratio is finally 2.43. The dividend yield amounts to 3.31%.
Stock Charts:
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| Long-Term Stock Price Chart of Intel Corporation (INTC) |
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| Long-Term Dividend Payment History of Intel Corporation (INTC) |
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| Long-Term Dividend Yield History of Intel Corporation (INTC) |
American Eagle Outfitters -- Yield: 3.29%
American Eagle Outfitters (NYSE:AEO) employs 6,500 people, generates revenue of $3,521.85 million and has a net income of $213.29 million. The current market capitalization stands at $2.65 billion.American Eagle Outfitters’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $473.54 million. The EBITDA margin is 13.45% (the operating margin is 9.08% and the net profit margin 6.06%).
Financials: The total debt represents 0.00% of American Eagle Outfitters assets and the total debt in relation to the equity amounts to 0.00%. Due to the financial situation, a return on equity of 19.47% was realized by American Eagle Outfitters.
Twelve trailing months earnings per share reached a value of $1.09. Last fiscal year, American Eagle Outfitters paid $0.50 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 13.99, the P/S ratio is 0.78 and the P/B ratio is finally 2.61. The dividend yield amounts to 3.29%.
Stock Charts:
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| Long-Term Stock Price Chart of American Eagle Outfitters (AEO) |
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| Long-Term Dividend Payment History of American Eagle Outfitters (AEO) |
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| Long-Term Dividend Yield History of American Eagle Outfitters (AEO) |
CA -- Yield: 3.27%
CA (NASDAQ:CA) employs 11,600 people, generates revenue of $4,262.00 million and has a net income of $810.00 million. The current market capitalization stands at $12.77 billion.CA’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,582.00 million. The EBITDA margin is 37.12% (the operating margin is 27.26% and the net profit margin 19.01%).
Financials: The total debt represents 11.50% of CA assets and the total debt in relation to the equity amounts to 22.45%. Due to the financial situation, a return on equity of 14.33% was realized by CA.
Twelve trailing months earnings per share reached a value of $1.70. Last fiscal year, CA paid $1.00 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.00, the P/S ratio is 2.99 and the P/B ratio is finally 2.37. The dividend yield amounts to 3.27%.
Stock Charts:
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| Long-Term Stock Price Chart of CA (CA) |
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| Long-Term Dividend Payment History of CA (CA) |
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| Long-Term Dividend Yield History of CA (CA) |
Paychex -- Yield: 3.19%
Paychex (NASDAQ:PAYX) employs 13,400 people, generates revenue of $2,739.60 million and has a net income of $674.90 million. The current market capitalization stands at $19.07 billion.Paychex’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,160.20 million. The EBITDA margin is 42.35% (the operating margin is 38.46% and the net profit margin 24.63%).
Financials: The total debt represents 0.00% of Paychex assets and the total debt in relation to the equity amounts to 0.00%. Due to the financial situation, a return on equity of 37.89% was realized by Paychex.
Twelve trailing months earnings per share reached a value of $2.04. Last fiscal year, Paychex paid $1.52 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.79, the P/S ratio is 6.92 and the P/B ratio is finally 10.65. The dividend yield amounts to 3.19%.
Stock Charts:
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| Long-Term Stock Price Chart of Paychex (PAYX) |
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| Long-Term Dividend Payment History of Paychex (PAYX) |
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| Long-Term Dividend Yield History of Paychex (PAYX) |
DSW -- Yield: 3.17%
DSW (NYSE:DSW) employs 11,900 people, generates revenue of $2,620.25 million and has a net income of $136.38 million. The current market capitalization stands at $2.02 billion.DSW’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $287.13 million. The EBITDA margin is 10.96% (the operating margin is 8.15% and the net profit margin 5.21%).
Financials: The total debt represents 0.00% of DSW assets and the total debt in relation to the equity amounts to 0.00%. Due to the financial situation, a return on equity of 14.20% was realized by DSW.
Twelve trailing months earnings per share reached a value of $1.53. Last fiscal year, DSW paid $0.80 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 16.50, the P/S ratio is 0.79 and the P/B ratio is finally 2.28. The dividend yield amounts to 3.17%.
Stock Charts:
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| Long-Term Stock Price Chart of DSW (DSW) |
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| Long-Term Dividend Payment History of DSW (DSW) |
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| Long-Term Dividend Yield History of DSW (DSW) |
Darden Restaurants -- Yield: 3.13%
Darden Restaurants (NYSE:DRI) employs 148,892 people, generates revenue of $6,764.00 million and has a net income of $196.40 million. The current market capitalization stands at $8.11 billion.Darden Restaurants’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $789.00 million. The EBITDA margin is 11.66% (the operating margin is 5.44% and the net profit margin 2.90%).
Financials: The total debt represents 24.48% of Darden Restaurants assets and the total debt in relation to the equity amounts to 62.88%. Due to the financial situation, a return on equity of 8.75% was realized by Darden Restaurants.
Twelve trailing months earnings per share reached a value of $2.61. Last fiscal year, Darden Restaurants paid $2.20 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.44, the P/S ratio is 1.20 and the P/B ratio is finally 3.47. The dividend yield amounts to 3.13%.
Stock Charts:
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| Long-Term Stock Price Chart of Darden Restaurants (DRI) |
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| Long-Term Dividend Payment History of Darden Restaurants (DRI) |
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| Long-Term Dividend Yield History of Darden Restaurants (DRI) |