8 Oversold Stocks With Strong Inventory Trends

Interested in potential rebound candidates? For ideas, we ran a screen you might find interesting.

We ran a screen on stocks that are technically oversold, with RSI(14) below 40. We screened these stocks for those with positive trends in revenue growth relative to change in inventory year-over-year: growth in revenue exceeding their growth in inventory year-over-year, as well as inventory becoming a smaller portion of current assets, indicating a strong liquidity position as well.

?Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.?

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We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these stocks are set to rebound? Use this list as a starting point for your own analysis.

List sorted alphabetically.

1. AngioDynamics Inc. (ANGO): Designs, develops, manufactures, and markets various therapeutic and diagnostic devices that enable interventional physicians to treat PVD, tumors, and other non-coronary diseases. RSI(14) at 35.14. Revenue grew by 8.86% during the most recent quarter ($58.1M vs. $53.37M y/y). Inventory grew by -10.08% during the same time period ($29.43M vs. $32.73M y/y). Inventory, as a percentage of current assets, decreased from 18.44% to 14.3% during the most recent quarter (comparing 13 weeks ending 2011-11-30 to 13 weeks ending 2010-11-30).

2. China XD Plastics Company Ltd. (CXDC): RSI(14) at 33.4. Revenue grew by 58.87% during the most recent quarter ($103.82M vs. $65.35M y/y). Inventory grew by 10.44% during the same time period ($30.56M vs. $27.67M y/y). Inventory, as a percentage of current assets, decreased from 31.57% to 11.56% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

3. Newpark Resources Inc. (NR): Provides fluids management, waste disposal, and well site preparation products and services primarily to the oil and gas exploration and production industry. RSI(14) at 33.57. Revenue grew by 45.69% during the most recent quarter ($261.19M vs. $179.28M y/y). Inventory grew by 32.99% during the same time period ($156.44M vs. $117.63M y/y). Inventory, as a percentage of current assets, decreased from 34.44% to 31.09% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

4. ONEOK Inc. (OKE): Operates as a natural gas distributor primarily in the United States. RSI(14) at 32.51. Revenue grew by 22.17% during the most recent quarter ($3,595.19M vs. $2,942.7M y/y). Inventory grew by -6.48% during the same time period ($658.06M vs. $703.68M y/y). Inventory, as a percentage of current assets, decreased from 35.38% to 28.46% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

5. Procter & Gamble Co. (PG): Provides consumer packaged goods in the United States and internationally. RSI(14) at 36.6. Revenue grew by 3.69% during the most recent quarter ($22,135M vs. $21,347M y/y). Inventory grew by 0.28% during the same time period ($7,444M vs. $7,423M y/y). Inventory, as a percentage of current assets, decreased from 34.% to 31.47% during the most recent quarter (comparing 3 months ending 2011-12-31 to 3 months ending 2010-12-31).

6. Quidel Corp. (QDEL): Engages in the development, manufacture, and marketing of diagnostic testing solutions for applications primarily in infectious diseases, and reproductive and women's health. RSI(14) at 34.42. Revenue grew by 17.29% during the most recent quarter ($33.11M vs. $28.23M y/y). Inventory grew by -22.9% during the same time period ($14.85M vs. $19.26M y/y). Inventory, as a percentage of current assets, decreased from 34.63% to 16.% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

7. RTI Biologics, Inc. (RTIX): Produces orthopedic and other surgical implants that repair and promote the natural healing of human bone and other human tissues, and improve surgical outcomes. RSI(14) at 34.17. Revenue grew by 1.% during the most recent quarter ($42.26M vs. $41.84M y/y). Inventory grew by -12.37% during the same time period ($78.54M vs. $89.63M y/y). Inventory, as a percentage of current assets, decreased from 54.78% to 48.45% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

8. Summer Infant, Inc. (SUMR): Engages in the design, marketing, and distribution of branded juvenile health, safety, and wellness products to retailers primarily in North America and the United Kingdom. RSI(14) at 36.29. Revenue grew by 27.19% during the most recent quarter ($63.34M vs. $49.8M y/y). Inventory grew by -4.43% during the same time period ($43.8M vs. $45.83M y/y). Inventory, as a percentage of current assets, decreased from 49.08% to 41.13% during the most recent quarter (comparing 3 months ending 2011-09-30 to 3 months ending 2010-09-30).

*Accounting data sourced from Google Finance, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.