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Tickers in this Article: BJS, CDNS, DVR, FNM, WFMI
The typical way individual investors attempt to grow their savings in the stock market is by buying and holding common stocks over long periods of time. Indeed, there exists large profit to be made for diligent investors who regularly scan the market looking for undervalued stocks to buy up on the cheap and then hold in expectation of substantial share price increases.

However, investors who follow a long-only investment strategy can only profit making trades on stocks that increase in price. They've lost the opportunity to profit from stocks that drop.

Don't Sell Your Returns Short
In order to maximize their profit potential, savvy investors know to search not only for attractive long positions to enter in to, but potentially lucrative short-selling opportunities as well. Theoretically, opening up your investing strategy to include short positions, as opposed to only long positions, doubles the amount of potential profitable stock trades you can find. During bear markets this advantage can prove critical and can go a long way to helping you beat the market. (To learn more, check out Short Selling Tutorial.)

Tuesday Short Stack
With that in mind, how can investors determine which stocks will fall in price going forward? Unfortunately, there is no crystal ball, and any number of different analysis techniques can potentially signal that a stock may be set to decrease in price.

However, as a general rule of thumb, stocks that have already been trending significantly downwards over a one-month period of time, and are expected to produce negative EPS growth for the current year, are good places to start looking for short sale candidates. Here are five stocks that fit that bill:

Company Est. Annual EPS Growth* 4-Week Price Change
BJ Services
-20.9% -13.2%
Cadence Design
-121.7% -27.1%
Cal Dive International
-28.7% -14.4%
Fannie Mae
-46.4% -11.7%
Whole Foods
-28.8% -11.4%
Data as of market close August 11, 2008. *Current fiscal year\'s estimate vs. previous year.

Whole Foods Floundering
I shopped at Whole Foods recently and overall I enjoyed my experience, but that doesn't mean I'll be buying shares in the organic supermarket anytime soon. The company has a pile of problems right now.

Whole Foods is coming off a lousy third quarter. For the period ended July 6, the Texas-based company earned roughly $33.9 million, or 24 cents per share. That's sharply lower than the $49.1 million, or 35 cents per share, it earned in the comparable period last year. It was also well shy of the 31 cents per share that analysts expected.

The quarter was bad, but there are even deeper issues to be concerned about. The one-time Wall Street darling is also suspending its cash dividend. And the company's unique angle isn't quite so unique anymore. Heck, even Wal-Mart is selling organic foods.

Wall Street Expectations
I doubt the recent woes will destroy the company, but they place a bit of a damper on the stock. At present the Street's expectations are that Whole Foods will earn 99 cents per share this year. That's down sharply than the $1.29 it earned last year.

Next year's estimate is a bit brighter, however, at $1.20 per share. Long story short, I think that the stock will probably drift a bit lower this year and that tax loss selling toward the end of the year could have an impact. Keep in mind that the shares are well off their 52-week high. (For more on analyst expectations, be sure to read our related article Analyst Forecasts Spell Disaster For Some Stocks.)

Are these stocks worthy of selling short? Be sure to join in the FREE Stock Picking Community to share your thoughts and see what other investors are saying.

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