A special note for traders out there: One of Porter Stansberry's favorite "short sale" candidates is breaking down…
In today's age of government bailouts and boondoggles, we encourage trading-oriented readers to become familiar with the concept of short selling. A "short sale" is a trade that allows you to profit as a stock decreases in price, rather than as it increases in price. Few analysts are as skilled at finding these "headed lower" stocks than our colleague Porter Stansberry.
In just the past few years, Porter has nailed the bankruptcy of General Motors, Freddie Mac, and Fannie Mae. Porter targets businesses with declining revenues, obsolete business models, and big debt loads – businesses like USA Today publisher Gannett (GCI). Porter notes the newspaper publisher competes in a low-margin business that is suffering declining revenues… all the while trying to service a huge debt load.
As you can see from today's chart, the market likes Porter's thesis. After surging 800% off its March 2009 panic bottom, Gannett now sports the chart of a rocket that has run out of fuel. The stock has sputtered from $18 per share to $13 in the past four months. It just broke down to its lowest low in six months on massive selling volume. Trend followers, here's one to play on the downside…
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