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In his book, "Finding Winners Among Depressed and Low-Priced Stocks," Richard Evans pinpoints several criteria for selecting low-priced issues. As Higher Returns newsletter reports, Evans' system looks only at NYSE-listed stocks that have declined over 75 percent and have taken a long time to do so.

"Richard Evans' system emphasizes two important patterns," says Higher Returns. "The stock should have suffered a steep decline, showing strong rally attempts all the way down; and it should then have gone through a long flattening period, preferably 12 months or more. Such stocks tend to be little-followed by Wall Street, adding to the downward pressure on them."Using Evans' technical strategy, plus its own fundamental screens, Higher Returns recently selected six low-priced stocks it believes have solid rebound potential:

- GENESCO was kicked off Standard & Poor's in 1994 and then dumped by institutions, notes H.R. "It's following its 1994 restructuring plan by selling noncore units and focusing on its Johnston & Murphy, Dockers, Nautica and Code West footwear lines. Losses have narrowed in recent quarters. Substantial insider buying confirms the firm's confidence in the future."

- ROLLINS ENVIRONMENTAL has made some successful acquisitions and changes in upper management to ensure its strong position in the high-tech waste-management-services industry, says H.R. "Try to accumulate the stock at prices betwween 4 and 5, preferably below 4 1/2."

- SERVICE MERCHANDISE is a buy on pullbacks below 5, according to H.R. "Last year produced record sales of $4.1 billion, though earnings fell to $0.55 from $0.81. The drop was due to investments in the firm's future, as it reduced long-term debt and strengthened its balance sheet. The company has reduced the number of stores each regional manager is responsible for and put more, better-trained sales staff at each store. Service added 15 stores in 1994, giving it a total of 406."

- ELSCINT LTD., the Israeli medical diagnostic imaging concern, has dropped 76 percent from its 1993 high, says H.R. "Sales have been rising, although earnings have remained steady, as the company continues to invest in new products and markets. Early this year, Elscint reported a $23 million sale of medical imaging equipment to China."