By Stockpickr Guest Columnist Glen Bradford

Relative stock analysis comes in handy when you think you're trying to compare two companies and deciding which to own. Finding overpriced stocks in this market is difficult, but I've got four you should dump -- and four you should buy into when you sell the dumpers.

The stocks I'm advising that you sell have intrinsic values that are dangerously close to their market values. This leads me to think that they will underperform the market as far as stock price goes over the next few years. The ones that I am advising that you buy into after you sell are underpriced based on my intrinsic value calculations. Seems easy enough. Right?

I expect to outperform the market by selling stocks priced to underperform and buy into underpriced outperformers. Good news: Analysts agree with my picks based on trailing 12-month P/E and forecasted PE and PEG ratios.

The first stock to sell is a specialty chemicals company, Sigma Aldrich (SIAL). It's priced to grow at 12.1%, and it's growing revenues and net incomes in a highly predictable manner at 13% and 11%, respectively. As far as fundamentals go, there is little upside. Last year, Sigma grew revenues and net incomes at 14% and 13%, so it is doing basically the same.

Nevertheless, sell this stock and buy a global energy company priced way below where it should be: Chicago Bridge & Iron (CBI). It's priced to grow at 5.7% and is growing at even higher levels of predictability and higher growth rates: 43% over the last three years. Plus, you can benefit from a one-time write-off -- the stuff dreams are made of because it tends to drive the stock price down but has little effect on future company growth. Buy Chicago Bridge & Iron up to $50.

The next one to jump out of is a premier consumer health company and member of the Dow Jones, Johnson & Johnson (JNJ). My reason to sell this is simple: It's priced to grow at 8.8%, and it's growing revenues at 9% and net incomes at 8%. Where's the upside? I wasn't surprised to see Johnson & Johnson underperforming the market over the last five years. Great company, lousy investment.

Take your money and put it in American Oriental Bioengineering (AOB) instead. Just as the name implies, it's a Chinese pharmaceutical/biotechnology company. Priced to grow at 4.6% and historically growing at no less than 71% -- and in a more predictable fashion than Johnson & Johnson -- AOB is my kind of company. I'm not selling it till it's above $20. I expect that AOB will triple before Johnson & Johnson can even think of doubling.

The next sell is a medical technology company and a member of the S&P 500: Becton Dickinson (BDX). This company has done a good job increasing net income --presumably by cutting costs, because it hasn't had much help from revenues. It's implied to grow at 9.3%, and that's just about as fast as revenues have been growing over the past four years. How much more can Becton cut costs?

Probably not as much as Kinetic Concepts (KCI) can increase its stock price. With revenue growth at 18% and net income growth at 43% over the last four years, that this stock is priced to die and implied to grow at 2.9% is ridiculous. Kinetic's worth at least $60 a share. It just bought LifeCell and is making deals with 3M (MMM), wheeling and dealing success.

I'm very confident that Ben Graham would agree with me on these. But what does he know? He's only authored some of the most sought-after titles, such as The Intelligent Investor and Security Analysis -- and taught Warren Buffett.

Disclaimer: I own AOB, KCI and CBI. I have no exposure to JNJ, SIAL or BDX, but I use the shampoo.

For more of Glen's ideas, go to GlenBradford.com.

Posted on Sept. 22, 2008