I used to be afraid to short stocks that were either:
+ Too cheap (single digit prices);
+ Already badly battered
But this is like avoiding buying stocks that have gone up "too much" in price (like, say, AAPL when it crossed the $100/share level early last year). The strong get stronger, and the weak get weaker.
Here's one of my best shorts in my portfolio (which is 100% short at this point, by the way):
