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Tickers in this Article: BGS, DIN, FBN, TWB, WGO
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 decrease in price.

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. 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 Investopedia's Short Selling Tutorial.)

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

Your Five High Short Stack

Company Est. EPS Growth This Year* 4-Week Price Change
B&G Foods
(NYSE:BGS)
-22.73 -19.57
Dinequity
(NYSE:DIN)
-71.5 -20.12
Furniture Brands
(NYSE:FBN)
-137.86 -22.41
Tween Brands
(NYSE:TWB)
-46.45 -23.19
Winnebago
(NYSE:WGO)
-72.73 -11.44
*Current quarter\'s estimate vs. previous quarter\'s reported EPS. Data as of market close August 22, 2008.


Winnebago Headed Down Hill
Let's face it the high cost of fuel has really put a pinch on the average American. It's become such a concern, that many of the major automobile manufacturers have plans to focus more on building more efficient models. Of course the high cost of fuel hasn't just hurt commuters, it's also put a vice grip on the wallets of those that like to hit the open road in an recreational vehicle (RV) or motor home.

Just ask Winnebago, the No.1 manufacturer of motor homes in the U.S. The company is coming off a lousy third quarter where it saw its Q3 revenue cut nearly in half to $139 million from $232 million. It's also seen some pretty serious margin pressure. In the period ended May 3, it's gross margin came in at 1.9% which was well below the 11.3% it reported in the comparable period in 2007.

Perhaps not surprisingly the Street isn't expecting too much out of the company in terms of earnings. Winnebego is currently expected to earn 37 cents per share this fiscal year and 39 cents per share in 2009, according to Yahoo Finanace. For a stock that trades at $11 and change that's not overly impressive. Tax loss selling could hurt the shares, too. (For more read Selling Losing Securities For A Tax Advantage.)

The Flip Side
I think that a dramatic pullback in oil process could have a positive impact on the stock. In addition, once tax loss selling season passes the stock could pop.

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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