`How` to Create Winning Screens

Each week in this article, I usually go over a unique way to screen for stocks or I’ll publish a proven, profitable screening strategy.

But is this week’s article, I wanted to go beyond that and talk a bit about ‘how’ I’m able to do this.

For instance, in many of my winningest strategies, I’ll routinely create my own custom expressions. Simply put, I’ll compare one item to another or I’ll combine different items together or I’ll even compare an item’s value to its value from a different time period (or periods).

It’s quite easy to do in the Research Wizard.

But most programs just can’t do this. Either they don’t have the customization capability or they don’t have the historical data.

This kind of flexibility, allows me to extract greater meaning from my screening items.

For example; If you read that XYZQ stock (fictitious stock symbol), had a P/E ratio of 40, you would probably have this idea in your mind that it’s ‘over-valued’ or that it’s trading at too many times its earnings.

But what if you read that its 40 P/E was actually lower than the average for its industry and that it was actually below its own historical norm. That might cause you to look at it entirely differently, wouldn’t it?

Even something as mundane as an average broker rating is given greater meaning.

If an average broker rating of a stock is 2, you may think, ‘great’.

But what if you saw it steadily eroding from a 1, to a 1.2, to a 1.6, to a 1.8 and now to a 2?

You now have a more complete picture.

Yes, it’s a 2. But why did it go from a 1 to a 2 over the last few weeks? This can be important stuff.

And if you had an opportunity to pick the perfect stock, wouldn’t you rather have a stock that’s getting ‘better’ rather than getting ‘worse’?

This is what I’m talking about.

I don’t mean for this week’s article to sound too much like an advertisement for the Research Wizard, but I always try to convey something important in this column.

And as I was going over my screens this weekend (as I always do), I realized that almost all of the strategies that I rely on, could not be done in any other program other than the Research Wizard.

Even something as ‘simple’ as insuring that you always only get a certain number of stocks in your screen/portfolio each period. That may seem like no big deal, but what if you only had a certain amount of money in your stock account, and your desire was to trade an equal dollar weighted portfolio of five stocks each month. Our ‘limiting’ operators, make this possible.

But if your strategy routinely produces more than five stocks each period, and you simply can’t facilitate more than five stocks in your account at a time, what good is a ‘more-than-five-stock’ strategy going to do you?

So this week, instead of writing about a powerful screening strategy, I decided to write about the powerful program that makes my powerful screening strategies possible. (And yours too.)

But to make sure I don’t disappoint, here’s five stocks taken from some of my winningest screening strategies (for Mon., 7/11/05);

CDIS Cal Dive International, Inc.
(from the ‘EPS Growth, Past & Present’ screen, and the ‘Upgrades and Revisions2’ screen)

JLG JLG Industries, Inc.
(from the ‘ROE’ screen, and the ‘Sales and Margins’ screen)

OSUR - Snapshot Report Orasure Technologies, Inc.
(from the ‘Breakouts’ screen)

STFC - Snapshot Report State Auto Financial Corporation
(from the ‘Winning Ways’ screen)

UCI UICI
(from the ‘ROE’ screen, and the ‘Sales and Margins’ screen)

(Of course, you can get them all by trying the Research Wizard.)

All the Screen of the Week strategies are created and back-tested using the Research Wizard software from Zacks Investment Research. Learn more about the Research Wizard free trial offer and our new special report “Top 10 Stock Screening Strategies”
Click here and find out how .

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.