Zacks.com Featured Expert Kevin Matras Highlights: Calgon Carbon, Dreamworks Animation and Insight Enterprises.

CHICAGO -- Kevin Matras goes over the importance of screening and backtesting. Stocks in this week's article are Calgon Carbon Corporation (NYSE: CCC), Dreamworks Animation (NYSE: DWA) and Insight Enterprises, Inc. (NASDAQ: NSIT). 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:

For this week's article, I'm starting at square one and going over the importance of screening in your investment decisions. But even more essential, I'm going to explain why backtesting is the most important step of all.

Why Should I Use a Stock Screener?

There are over 10,000 stocks out there and you need a way to find the good ones. Other than buying the stocks that are talked about in the media or among friends, how else are you going to find stocks that meet certain fundamental characteristics?

Most people do their own 'screening' one way or another. They may hear that a stock has a certain Growth Rate, or a certain P/E Ratio or Sales Surprise, for example. They then research stocks that meet this criteria. Well if you want to find stocks that meet certain criteria, you can find them quickly and easily with a stock screener. But, just because you narrow down 10,000 stocks to only a handful doesn't necessarily mean that you've picked the best stocks on the planet.

But how will you know?

Backtesting!

Once you've created a screen, you can backtest and see how the screening strategy performed. In other words, does your screen generally find stocks that go up once they've been identified? Or does your screen generally find stocks that get buried?

With backtesting, you can see how successful your stock-picking strategy has performed in the past, so you'll have a better idea as to what your probability of success will be now and in the future.

Keep in mind, a screening and backtesting program isn't a 'box of magic'. But it's a great way to see what works and what doesn't BEFORE you put your money at risk!

Don't get me wrong, just because you have a great strategy for picking winning stocks, it isn't going to preclude you from ever having another loser. On the contrary, even some of the best strategies 'only' have win ratios of 70% or 80%. (NOT 100%.) But if your strategy picks winners far more often than losers, you can feel confident that your next pick will have a high probability of success. And don't be the guy who 'accidentally' gets into one or two good stocks and thinks he's the next Warren Buffett. If your stock account is important to you, test your stock-picking strategies to see if your method for finding winners is a repeatable one.

And that's why someone should use a Screener and a Backtester.

As usual, I'll close with a few new picks from some of my favorite backtested screening strategies for the week of 9/18/07:

CCC     Calgon Carbon Corp.
        (from the Breakouts screen)

DWA     Dreamworks Animation
        (from the Filtered Zacks Rank screen)

NSIT    Insight Enterprises, Inc.
        (from the Big Money screen)

Sign up now for your two-week free trial to the Research Wizard and take your stock screening to another level. And when you're done, backtest it to see if it works! And don't forget to check out the winning trading strategies that come loaded with the program. Know when to buy and when sell. It's all there: 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

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Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros http://at.zacks.com/?id=113

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Disclaimer: 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 to buy or sell any security.