Zacks.com Featured Expert Kevin Matras Highlights: A.S.V., Inc., Micros System, Inc. and World Air Holdings, Inc.CHICAGO -- Kevin Matras shows how you can beat the market with his 'Upgrades and Revisions' strategy. Stocks in this week's article are: A.S.V., Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ASVI ASVI Alien Status Verification Index ASVI Alien Status Verification Index (US INS) ), Micros System, Inc. (NASDAQ:MCRS MCRS Minnesota Companion Rabbit Society MCRS Marine Corps Recruiting Station MCRS Management Control Reporting System MCRS Mennonite Coalition for Refugee Support (Kitchener, Waterloo, Canada) MCRS Metropolitan Center for Regional Studies ) and World Air Holdings, Inc. (NASDAQ:WLDA). Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=109 Screen of the Week written by Kevin Matras of Zacks Investment Research Zacks Investment Research A firm that compiles earnings estimates and brokerage firm investment recommendations for thousands of publicly traded firms. : This week, Kevin is going to highlight a screening strategy that primarily focuses on stocks with Increasing Earnings Estimates and Rating Upgrades. Studies have shown that "earnings estimate revisions are the most powerful force driving stock prices." And stocks receiving upward EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. revisions will generally see the brokers that cover them upgrade their ratings too. This screen generates on average only 8-10 stocks per month, has an excellent win ratio and has shown consistently impressive returns, year after year after year. The Parameters to this Strategy are: Zacks Rank equal to 1 (The Zacks Rank is probably one of the best, if not the best rating system out there.) % Change Q1 Estimates over the last 4 weeks greater than or equal to 0 (earnings with fresh upward revisions) % Rating Change over 4 weeks greater than or equal to 0 (since analysts have such a huge upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside bias, Kevin is excluding anything that's been even slightly downgraded) P/E P/E See: Price/earnings ratio using 12 mo. Forward EPS Estimates less than or equal to 65 (that's right, 65) % Change Actual EPS Q0/Q-1 greater than or equal to 0 (positive EPS growth this quarter over last) and % Change Actual EPS Q-1/Q-2 greater than or equal to 0 (positive EPS growth last quarter over the one before that) (In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , two quarters of positive EPS growth.) % Change Actual EPS F0/F-1 greater than or equal to 0 (positive EPS growth this year over last) 5 Year Historical EPS Growth greater than or equal to 17 (yes, 17) Last EPS Surprise greater than or equal to 0 (no negative surprises allowed) Price/Sales ratio Price-to-sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market cap by the company's revenue in the most recent fiscal year (or the most recent four fiscal quarters); or, equivalently, divide the per-share less than or equal to 4 (actually, Kevin had great success with the Price/Sales ratio being between 2, 3 and 4, but he went with 4 because it didn't narrow down the stock selection so much, ... but if you want to narrow it down, tighten the ratio up a bit) And finally, the stocks all had to be trading at a minimum of $3 or higher. The Results: Kevin ran a series of tests over the last 4 year time span (thru 2004), as well as a series of tests for each of the last 4 yrs. individually. He rebalanced the portfolio every four weeks and started each run on different start dates so each test would be rebalanced over a different set of four-week periods. (This exercise was done to eliminate coincidence Coincidence is the noteworthy alignment of two or more events or circumstances without obvious causal connection. The word is derived from the Latin co- ("in", "with", "together") and incidere ("to fall on"). and verify robustness.) Over the last 4 years, this strategy has shown an average annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. gross return of 63.7% a year, with an average win ratio (winning periods divided by the total number of periods) of 73%. And again, it produces on average of 8-10 stocks for your portfolio each month. To break it down further; in 2001, the average annualized gross returns were 55.8% with an average win ratio of 71%. In 2002, the average annualized gross returns were 42.1% with an average win ratio of 68%. In 2003, the average annualized gross returns came in at a whopping 125.8%. (In fact, even the smallest run produced a gross return of over 100%.) The average win ratio came in at 87%! And in 2004, the average annualized gross returns were up 41.8% with an average win ratio of 68%. This strategy comes loaded with the Research Wizard Instructional help in an application or system development environment that guides the user through a series of multiple choice questions to accomplish a task. For the most part, wizards are more effective than the help menus found in most applications, which often border on the atrocious. program and is called; Upgrades and Revisions2. Here's 3 stocks from this week's list (6/13/05). ASVI A.S.V., Inc. MCRS Micros System, Inc. WLDA World Air Holdings, Inc. Get the rest of the stocks on this list and start using this winning strategy in your own portfolio. Sign up now for your free trial to the Research Wizard and start making better decisions today. http://at.zacks.com/?id=111 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. About Screen of the Week Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=112 About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 to compile To translate a program written in a high-level programming language into machine language. See compiler. , analyze, and distribute investment research to both institutional and individual investors. The guiding principle behind Zacks work is the belief that investment experts, such as brokerage analysts and investment newsletter writers, have superior knowledge about how to invest successfully. The goal is to unlock these pros' profitable insights for individual investors hard-pressed to find this valuable information in one source. A free subscription to "Profit from the Pros" weekly e-mail newsletter provides the best way to use these experts' insights for more profitable investing. Register for a free subscription to the Profit from the Pros newsletter at http://at.zacks.com/?id=113 Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. Disclaimer (networking) disclaimer - Statement ritually appended to many Usenet postings (sometimes automatically, by the posting software) reiterating the fact (which should be obvious, but is easily forgotten) that the article reflects its author's opinions and not necessarily those of the : Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual to buy or sell any security. |
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