What does a troika of losing stocks such as AMR Corporation (NYSE: AMR),
Majesco Entertainment Co (NASDAQ:
COOL), and FiberTower
FTWR) mean for shareholders? Well, given the correct market conditions
they could actually be outperformers. These stocks have already fallen more
than 20 per cent in the last week and remain strong bounce back candidates for the
week ahead. With the S&P 500 trading near its important technical levels, selected
equities could see a sharp snap up recovery in the next week.
Shares of the troubled airline company AMR Corporation (NYSE: AMR)
would be strong contenders for a bounce back. The stock has lost nearly 37 per
cent in market capitalisation in the last month or so. I see the stock rebounding
primarily because of two reasons – first because of a reversal in global crude
oil prices which could bring down the cost of air turbine fuel (ATF) and second,
because the stock has already lost substantial value in recent times. Nearly 15
per cent of the shares are shorted and positive market conditions next week may
create a short squeeze situation. Nevertheless, the stock remains in an attractive
range at $1.75.
COOL) is another stock where investors must have better discovered the
physical phenomena called “gravity”. The stock has lost nearly 10 per cent in
the last 10 days and that too on good volumes. All this is despite the fact
that there is fundamentally nothing wrong with the stock or the company.
Naturally, the stock will bounce back to its earlier high levels of $3.5 and it
may very well be next week. The stock currently trades at $3.
FTWR) remains a hard sell after all the beating the stock got in the last
couple of days. Recent news developments around the company, especially the
decision to axe 40 per cent of its workforce, are difficult to find favour in
media. However, these developments make sense from a business point of view at
the same time. All said and done, the stock has a book value of nearly $5.4 per
share and the current market price of less than a dollar is simply, too steep a