Zacks.com Featured Expert Kevin Matras Highlights: Hercules, Inc., Ladish Co., Inc. and Superior Essex.

CHICAGO -- Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in both up markets and down. Stocks in this week's article are Hercules, Inc. (NYSE:HPC), Ladish Co., Inc. (NASDAQ:LDSH) and Superior Essex Inc. (NASDAQ:SPSX). 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:

The last couple of weeks (bearish) have been a much different market than the few months that preceded it (bullish). And while I expect the overdone pullback to abate pretty soon, it's nice to know you have screening strategies that can pick winning stocks in both up markets and down.

This week, I'm going to go over a Relative Price Strength screen that's been beating the market for the last several years.

The parameters to this screen are as follows:

Zacks Rank less than or equal to 1
(Only Buys and Strong Buys)

Avg. Broker Rating equal to 1
(Since Brokers are typically bullish 'everything', they have to be
fully on board.)

Relative % Price change - 12 weeks greater than or equal to 15
(I'm looking for stocks that are outperforming the S&P 500 by 15% or
greater over the last 12 weeks.)

% Price Change - 12 weeks greater than or equal to 5
(Simply beating the S&P is not enough. They also have to be up in
price in absolute terms by 5% or more.)

Current Price/52 Week High-Low Range greater than or equal to 80
(I'm looking for stocks that are trading at greater than or equal to
80% its 52-Week High/Low Range. Only stocks in the upper part of their
trends are allowed.)

Current Price greater than or equal to 5
(They all have to be trading at a minimum of $5 or higher.)

The Results:

I ran a series of tests using a four-week holding period over the last three-year time span. Each test was started on a different start date to eliminate coincidental performance and to verify robustness.

In 2004, the strategy showed an average compounded gross return of 48.9%. In 2005, the returns were 64.6%. And so far in 2006 (YTD through 5/12/06), the returns stand at 14.9%. (This screen tests well using a one-week rebalance too.)

This week (week of 5/22/06) there are nine companies that pass this screen. Here are three of them:

HPC   Hercules, Inc.
LDSH  Ladish Co., Inc.
SPSX  Superior Essex Inc.

Learn how to find winning stocks in any market. Test this screen and others or build your own strategies and test them. It can all be done with the Research Wizard. Sign up for your free trial now. 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

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