Bracing for a Fall

A screen that I run semi-regularly on Value Line identifies stocks priced under $10 that have one of the service's two highest rankings. As a portfolio, this list has nearly doubled the market rate of return for more than 20 years, albeit with gut-wrenching volatility. It has been a tremendous source of undiscovered growth stocks and turnaround candidates.

But when I ran the screen in September, I was surprised to find only nine stocks. The list usually has about 25, and when the number is well below that, it means the market is approaching a topping or choppy period. Today, I found just six on my list of low-priced stocks that have high ranks for revenue and earnings growth potential. In addition, it was an entirely new list with no names repeated. This is highly unusual, so I went back to see what happened to the previous nine stocks. I expected to find that they had appreciated sharply and were no longer in the single digits. What I saw was exactly the opposite....416 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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