Kevin Matras goes over a Relative Price Strength strategy for finding winning stocks in all markets. Stocks in this week’s article are Amerisafe, Inc. (NASDAQ: AMSF), Amerigon, Inc. (NASDAQ: ARGN) and i2 Technologies, Inc. (NASDAQ: ITWO). 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 two weeks have been a tough market. And even though I remain positive, here’s a screen that doesn’t need a bull market to succeed. I’m going to go over a Relative Price Strength screen that’s been beating the market in both good times and bad.
The parameters to this screen are as follows:
- Zacks Rank less than or equal to 2 (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 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, i.e. no more than 20% from its 52 Week High. Only stocks high up in their uptrend 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 five-year time span. Each test was started on a different start date to eliminate coincidental performance and to verify robustness.
In the bear market of 2002, this strategy showed an average compounded gross return of 13.5%. In the cake-walk of 2003, it showed a whopping 102.9%. In 2004, the strategy showed an average compounded gross return of 48.9%. In 2005, the returns were 64.6%. And in 2006, the returns came in at 22.6%.
Here are three stocks that pass this screen for 3/6/07:
| AMSF | Amerisafe, Inc. | |
| ARGN | Amerigon, Inc. | |
| ITWO | i2 Technologies, 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.
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