Friday, September 5, 2014

How I Pick Stocks for my Watch List

I use a stock screener that I have developed for Fidelity Investments Custom Screeners. You will see that I am looking for good growth over the course of several years with momentum gaining in recent years. I want a high book value and a low PEG ratio. The trick of my screen is in the criteria of finding stocks that are all of the aforementioned yet are in the stocks that are the lowest percent off their 50 day Simple Moving Average. This final criteria is what gives me the Beat Up for NO Reason stock screener. Well, there is always a reason and that's OK because those reasons, in the stock market are short lived, for the most part. And it won't be long until there is reason to own it. Especially considering the great balance sheet they usually have.

PEG Ratio [Lowest 60%]
Book Value Growth (5year avg.) [Highest 20%]
Earnings growth three years [Highest 40%]
Earnings growth five years [Highest 20%]
Percent price off 50 day SMA [Lowest 40%]
Market Cap [Mid Cap]

Finally, to check up on the stocks that show up, I look them up in Google Finance and on the left margin is a link to "Financials" (<click on that to see an example) once in this I find at the top "Annual" and select that as I want yearly reporting. The first page you see is the earnings year over year. I look for an ever increasing amount of earnings here. Quick and simple. Then I go over to  "Balance Sheet"  (<click on that to see an example) and look for the following. I'll use CYBX as an example.
What I look for is the Total Assets and then scroll down and look at Total Liabilities and then scroll down and look at Total Equity. TA-TL=TE  and we want that ratio to be no greater than 3:1. In other words.
If a stock makes it all the way to this point, it is included in my watch list. I usually keep my watchlist updated each month as they can fall in or out of the criteria in that amount of time. There are also new stocks that qualify that I don't want to miss out on.
Now, there are reasons that the price has fallen. We don't know this without further research. I will usually go the the individual stock's news and read as much as I can to find out what the reason for the price decline has been. Or maybe check to see the short sells which can give it negative reaction. But what I like about the stocks that show up on my screen, usually if they have short sellers out there trying to take advantage of it, they usually backfire because the company is strong and the shorts don't stick. This causes the those investors to cover their shorts, which in turn brings the price up. But those are details that exist that I don't pay too much attention to.
Finally, I use sophisticated charts that I developed to read the direction and momentum and reversals of each stocks price. Which is very complicated so I won't get into that here. But keep in mind that the charts are what drives my decisions most of all. I don't just get into a stock because it is on my watch list. There is a more perfect timing and it is revealed in the charts.

Monday, August 25, 2014

CYBX is a SELL with a 4.6% loss

In spite of the fact that the balance sheets and earnings look good for CYBX the indicator just hit the SELL signal. I had heard that there may have been some current earnings worries. That may have been the source of the pricing trouble. I've learned not to hold onto hope with these stocks. We reduce the downside and optimize the upside and hopefully in the end we make a lot more than we lose. So far that has been the case.

ANFI up 20% since July 21 recommendation

And of course I kick myself again. WHY DIDN'T I BUY THIS??????? Ugggh. I assure myself that this is just a trial year for my investment theories and indicators. I want a nice track record of success prior to committing 100% trust in my system. But still, missing out on 20% in a month is a hard thing to look at and see it in hindsight.

After a little hiatus, three new stocks are a BUY. BWLD, FNGN and ESV

Just checked the earnings and debt to asset ratio and it's all GO on these stocks.
First is Buffalo Wild Wings BWLD the charts just popped into the BUY signal at $147.71 I was a few days late on this one as it had actually indicated last Thursday, however, a few days lost is not so bad.
Second is Financial Engines FNGN which I had purchased Friday but did not have time to post it. That's OK because it came down a little on Friday but is recovering VERY nice today and is a BUY at $36.62
Finally we have ESV Ensco PLC Energy services and equipment category is a BUY at $50.00

Tuesday, July 29, 2014

ANFI UP 16.4% in one week per our recommendation

It's been going up like a rocket. Making 16.4% in one week is a dream. It was the 21st of July that the charts indicated a buy signal. One week later it has not looked back. Of course not all good things last forever. That is especially true in the stock market. Let's see where this one goes before the sell signal arrives.

Thursday, July 24, 2014

ANFI UP 11% in just a few days.

Only a few days ago, ANFI showed a BUY position.  Since that point ANFI has gone up 11% and climbing today. It currently is still in the HOLD position so for now let it ride. If you are happy with a whopping 11% return in just a few days, take advantage of that and sell if you wish.

Monday, July 21, 2014

ANFI a BUY today at $12.80

ANFI Amira Nature Foods LTD has indicated a Buy point at $12.80.  ANFI comes with growing earnings over the last four years. The liability to asset ratio is a little higher than I prefer. 2:1 vs 1:2. That isn't that unusual though. The natural foods industry is still in it's infancy. Young people are clamoring for healthy alternatives and probably will continue as they get older.

Sunday, July 20, 2014

Hold your Horses! These are ready to pop any day.

With the whipsaw of the market last week the indicators were not positive for any buys.  I felt that the suggestions were lacking a little but still don't want to stick my neck out on the possibilities of something positive happening.  The following stocks are all turning up, but unfortunately not in the "BUY" stage of their movement.  BUT, very close to that if they go up a couple more days. I just wanted to get the list out if anyone wanted to do some homework early and be prepared for the buy signal.  Once again, these are all stocks that have been in my variety of watch lists generated over the last month or so. Some are strong companies that have had their prices beat up for seemingly no reason. Others are from my NASDAQ GURU list which needs to be mentioned and recommended by at least three leading stock analysts.

PRIM   Primoris Services Corp.
FNGN  Financial Engines
PKG     Packaging Corp. (been on the list quite a while now)
ANFI   Amira Nature Foods
ROST  Ross Stores
MTOR Meritor Inc.
CEL     Cellcom Israel

Keep an eye on these. A couple may be set to really take off as the price has bottomed to long six month support levels with big upside potential.
I will follow them closely over the next week and report any that have reached the official BUY status.

Tuesday, July 8, 2014

The indicator works both ways SPWR down 8.6% and we are not in it

I've never really wrote anything about my charts at the sell side. It's kind of over at that point and who really wants to hear about negative numbers? It is actually nice to see negative numbers when you don't own the stock because you know that it may just open up an opportunity for another chance to buy in.  Sun Power is a good example.  As you can see from the post several days ago, we issued a sell on SPWR at $40. Yes, it was the charts that told us to sell. We did not just "feel" it was right, it was shown in B&W, "Time to Sell". And from that announcement until today, SPWR has dropped 8.6%.
I know there are those who like to make complicated hedges and options. I would love to really understand those techniques. But until then, I can only buy and sell. I think that by using the charts, we should fair pretty well taking advise for both BUY and SELL.

COH Coach is a BUY today at $35.26

Coach COH has an amazing balance sheet and earnings have increased year after year.  With the downturn in the price over the last month or so, the indicator now is showing a turn up. We are cautiously advising a buy recommendation in the midst of a little correction today.  The general market corrections always send little red flags up for extra care in executing a buy.