Before I invented The PPT, I used to spend countless hours scouring for stocks that takes me seconds to find now, literally. I am going to share one of my favorite screens with you leaches now, in the spirit of giving and democracy. The way I figure, if President Obama can spend billions on liberating a population of 6 million, the least I can do is share a simple screen or two.
Criteria:
Technical reading: over 2 (tech score consists of acc/dist, price performance, relative strength, volatility and volume, as well as proprietary “fifth column” and sub rosa metrics aka secret sauce)
Market cap: over 1 billion
ROE: over 15
Short %: over 10%
FPE: under 35
Quarterly Revenue Growth: over 25%
% from SMA 20: between -5% to +5%
Clarification: I am using SMA20 because I like buying stocks that are in uptrends. However, it’s not a deal killer.
Results:
CLR
INT
AMKR
CNS
SWI
PRAA
YGE
SOHU
CAVM
What’s next?
Cross reference seasonality data to see if there are any standouts.
Both PRAA and CNS standout in that regard. However, seasonality data does not make me buy stocks. It’s more of a novelty. The critical part of making the decision to buy a stock is timing. Is the timing right?
Enter recent PPT extreme range chart.
As you can see, The PPT registered a very high reading yesterday. As a matter of fact, it was the 2nd highest reading ever. To me, first and foremost, this is a sign to tread carefully, which is why I opted to nibble on FORM today, instead of bite. I still have a 25% cash position.
Finally, the last of the leg work is good old fashioned detective work, which entails reading through research, listening to conference calls and calling management. I know most of you do not bother to listening to calls or reaching out to management. Let me tell you, that is a HUGE mistake. How do you think I knew so much about FTK? There was no research available or informative press releases. Call the company and build a rapport. You will be shocked by the value you can extract from meeting with management or conducting private client conference calls.
These are just some of the methods used to find new ideas. Often times, ideas come out of left field. But the very best ones are homegrown out of a belief. Nothing beats conviction.
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