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We've mentioned it here before, but it's worth saying again: nearly half of a stock's price movement is tied to the performance of its respective group (Sector and Industry).
That being said, most great stocks from great groups often have some great peers as well.
If you find yourself in a killer trade (or wished you were in one), take a look at the characteristics of THAT STOCK and then hunt within its group to find OTHER STOCKS that share the same characteristics.
Does a certain outstanding stock exhibit great sales growth? I'm sure there are at least a few within its group that are also showing similar numbers.
What about increasing margins? If the stock is doing well, it's likely that the industry itself is experiencing meaningful increases in margins too.
This type of screening is often called 'modeling'. Figure out the components of what makes something successful and concentrate on that.
If you're in love with a certain stock or sector, but it's not doing anything ... or worse, moving against you ... then move on.
If you see great stocks in great groups while you're stuck in laggards or non-movers, find what stocks are successful and model them.
If the winningest stocks in a particular sector or industry are trading at PE ratios that you generally won't consider ... instead consider this: if you had considered them, they would be winning for you.
So therefore, see what characteristics some of the best stocks have in common and try getting on some of those.
Here's something to start you off.
For example, here's one of the top performing stocks in the Food Industry:
(HSY - Analyst Report) The Hershey Company
Now here are 5 others that have very similar characteristics:
(DMND - Analyst Report) Diamond Foods, Inc.
(MKC - Analyst Report) McCormick & Company, Inc.
(SJM - Analyst Report) The J.M. Smuucker Company
SMBL Smart Balance, Inc.
(THS - Snapshot Report) TreeHouse Foods, Inc.
If you're looking for new stock picking ideas, find a top industry or a top stock and start looking at its peers with the same or similar characteristics, and you'll find yourself in top performing stocks as well.
Remember the key to successful screening is in discovering those screens that have produced profitable results in the past. And that's exactly what you get with the powerful Screening and Backtesting ability of Research Wizard. You can do it. Learn how, today.
Click here for your 2 week FREE trial to the Research Wizard.
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.
Disclosure: Performance information for Zacks portfolios and strategies are available at: http://www.zacks.com/performance.