Over the last few weeks I’ve been asked over and over again what kinds of screens I’m running.
The answer is that aside from the many screening strategies I always run (because they work, I have been running a new one. And it’s put some awesome new picks on my radar screen.
This screen isn’t a trading strategy per se, but rather a screen to help me identify which sector and industry (and therefore stocks) held up the best in this recent sell-off.
That sector, by the way, is the medical sector.
The idea being, the ones that showed the greatest resiliency should be the ones that will breakout first.
Parameters:
The screen starts out with the usual items.
Price >= 5
Volume (Avg. 20 Days) >= 100,000
Then I specifically screen for the sector with the greatest relative price change over the last four weeks. Basically, I’m looking for the sector that performed (on average) the best in comparison to the S&P 500.
From there, I narrow that sector down to only those stocks with a
Zacks Rank of a 1 or 2. (The Zacks Rank is one of the best rating systems out there, so this automatically puts the odds in my favor.)
For good measure, I also make sure the stocks have positive earnings estimate revisions over the last four weeks for both Q(1) and F(1). Studies show that stocks with rising earnings estimates outperform the market.)
Then I narrow that list down even more by looking for the top 20 stocks within the top sector based on the relative percent change in price over four weeks. (First I look for the best sector based on the average percent change in price over four weeks. Then I zero in on the best 20 stocks within that sector.)
Lastly, I cull it down to the top 10 stocks within that sectors medium- sized industry.
This screen this week produced 20 stocks, and again, the best Sector was medical.
The top medium-sized industries within that sector are: drugs, medical care and medical products.
This screen has produced a lot of exciting new picks.
Instead of the usual three stocks I highlight in this article, here are five new top picks:
ARTC Arthrocare Corp.
Medical device company that develops, manufactures and markets
products based on its Coblation technology. The company’s strategy includes applying its patented technology for soft-tissue surgery for arthroscopic, cosmetic, spinal neurosurgery and more.
ERES eResearch Technology Inc.
Provider of integrated software applications and technology consulting services to the pharma., biotech. and medical device industries.
IVGN Invitrogen Corp.
Provides products and services that support academic and government research institutions and pharma. and biotech companies worldwide by providing essential life science technologies for disease research, drug discovery and commercial bioproduction.
MDCI Medical Action Industries, Inc.
Develops, manufactures, markets and distributes a variety of disposable surgical-related products.
TECH Techne Corp.
Holding company which has two wholly-owned operating subsidiaries: Research and Diagnostic Systems, Inc. and R&D Systems Europe Ltd. Its two main operating segments are hematology controls and biotechnology products.
You can open this screen up to look for the top two Sectors, top three sectors or top five sectors—whatever you choose.
Many screeners won’t let you screen for the top sectors or industries, but in the Research Wizard you can. Now you can find the top sectors based on whatever metric you like, and then drill down to the best industries; then it’s on to the best stocks.
Picking winning stocks has never been so easy, and now you can do it too.
Sign up for your two-week FREE trial to the Research Wizard today. Remember the key to successful screening is in discovering those screens that have produced profitable results in the past. And that’s exactly what you get with the powerful screening and backtesting ability of Research Wizard. You can do it! Try it today for free.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
