Finding #1 Stocks: Screening, Backtesting and Time-Proven Strategies

318 Pages·2011·9.58 MB·English

by  Kevin Matras

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FINDING #1
STOCKS
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FINDING #1
STOCKS
Screening, Backtesting, and
Time-Proven Strategies
Kevin Matras
John Wiley & Sons, Inc.
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Copyright © 2011 by John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Matras, Kevin.
Finding #1 Stocks: Screening, Backtesting, and Time-Proven Strategies / Kevin Matras.
p. cm.—(The Zacks Series; 1)
Includes index.
ISBN 978–0–470–90340–7 (hardback); ISBN 978–1–118–05797–1 (ebk);
ISBN 978–1–118–05798–8 (ebk); ISBN 978–1–118–05799–5 (ebk)
1. Stocks. 2. Investments. 3. Investment analysis. I. Zacks Investment Research (Firm). II. Title.
HG4661.M369 2011
332.63'2042—dc22
2010050388
Printed in the United States of America
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To every trader and investor
who wants to be better.
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Contents
Acknowledgments xiii
Introduction xv
Chapter 1
The Importance of Screening and Backtesting 1
Why Should I Use a Stock Screener? 1
Backtesting! 2
Chapter 2
Identifying What Kind of Trader You Are 5
Question 1: What Kinds of Stocks
Do You Want to Invest In? 5
Question 2: What Characteristics Do You Want
Your Stocks to Have? 6
Question 3: What Do You Want Your Stocks to
Do for You? 7
Chapter 3
Defi ning the Basic Trading Styles 9
Momentum Style 9
Aggressive Growth Style 11
Value Style 12
Growth and Income Style 12
“All Style” Style 13
Technical Analysis 14
Winning in Style 14
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viii CONTENTS
Chapter 4
Trading the Zacks Rank 15
The Zacks Rank versus the Market 15
About Len Zacks 17
Calculating the Zacks Rank 18
What the Rankings Mean 20
Four Factors of the Zacks Rank 24
Chapter 5
Beyond the Zacks Rank 27
Filtering the Zacks Rank 27
How Many Stocks Are Right for You? 32
Chapter 6
How to Trade the Strategies 33
Once a Month 33
Once a Week 35
Combining Holding Periods 35
Chapter 7
Winning Momentum Strategies 37
Big Money 37
Earnings Acceleration 42
Increasing Earnings 44
New Highs 46
Using New Highs for Sector and
Industry Analysis 50
Summary 53
Chapter 8
Winning Aggressive Growth Strategies 55
Small-Cap Growth 55
All-Cap Growth 61
Sizing Up the Markets 64
Zacks Rank 5 or 4 to 1 66
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