Alloy Steel Inc. (fka AYSI)

[DaveinHackensack]

Again, it doesn't predict stock prices in the short term. But it can tell you whether a company is financially distressed and at risk of bankruptcy or not.

AYSI's strong Z-score means I was able to place a buy order Wednesday confident that although the stock is down, the company is financially strong.

When a company's share price drops as far and fast as AYSI's has, there are two possibilities:

1) The drop in the share price accurately reflects a similarly steep deterioration in the company's fundamentals.

2) The drop in the share price is an over-reaction based on negative sentiment, and does not reflect a similarly steep deterioration in the company's fundamentals.

AYSI's strong Z-score suggests possibility 2) is the case. The "excellent" relative value rating VectorVest gives AYSI suggests this as well.