Finding #1 Stocks PDF

Finding #1 Stocks- Screening, Backtesting and Time-Proven Strategies

Finding #1 Stocks PDF- Screening, Backtesting and Time-Proven Strategies shows you how to implement the proven trading techniques used by Zacks—as well as some of his personal favorites—in your own trading. Focusing on earnings estimates and stock analysis, this reliable resource skillfully details how to create your own stock-picking screens and trading strategies and how to test them to ensure they work. Throughout the book, you’ll be introduced to practical and actionable strategies that can help you identify stocks with the highest probability of success, to maximize your returns and minimize your overall risk.

Category: Stock

Author: Kevin Matras 

Language: English

Free Download link: At the end of the post

Introduction

While there are many stock trading systems on the market today, that use a variety of different approaches and indicators, the approach used by Zacks Investment Research is built around the number one driver of stock prices: company earnings.

Based on Zacks Research Wizard product, this book provides you with market beating stock selection techniques and advice on how to build your own stock selection system. This practical guide discloses several trading methods that have outperformed the market for a long period of time and shows you how to screen stocks and develop selection criteria to build various types of stock portfolios, such as aggressive growth; growth and income; momentum; and value.

  • Highlights several of Zacks trading methods that have outperformed the market for extended periods of time
  • Discusses how to create customized systems incorporating elements of the Zacks approach with other types of fundamental and technical data
  • Includes a 30-day free subscription to Zacks Research Wizard software

Written with the serious investor in mind, Finding #1 Stocks will put you in a better position to excel in today’s dynamic markets.

_______

Let me congratulate you. Why? Because whether this is the first investment book you’ve ever read or the hundredth, the more you read, the more you learn, and the more you do, the better you’ll become at something, whatever that something happens to be.

Finding #1 Stocks is about becoming a better trader and investor. My goal is to show you how to do this with the proven, profitable trading techniques used by Zacks, a leading investment research firm focusing on earnings estimates and stock analysis for the individual investor. In addition, you’ll see plenty of my personal favorite trading strategies. And I’m also going to show you how you can create your own stock picking screens and trading strategies and how to test them to make sure they work.

Throughout this book, I will share with you real life, practical, and actionable information and strategies that you can start using immediately in your own trading, like how to identify stocks with the highest probability of success, when to sell to maximize your returns, and how to minimize your risk while doing so.

By developing the skills taught in this book, you can live the kind of life you want to live and have the kinds of freedoms and choices that greater financial success can give you. Best of all, you’ll see that it’s a lot easier than you think and you won’t have to stay glued to your computer screen to do it.

While all of the screening ideas and trading strategies explained in this book were created and tested with Zacks’ own stock picking and backtesting program called the Research Wizard, you can recreate many of these with your own screening program. Some screeners are more capable than others, but the information presented in this book can be applied to anybody’s trading without any special tools or set-ups. (If you don’t have a screening program, not to worry; go to page 287 in the back of the book for a free trial of the Research Wizard and follow along.). So read on for some great stock picking screens and trading strategies.

Your investments are one of the largest, most important chunks of money you will ever be responsible for in your entire life. (And if it isn’t now, it likely will be one day.)

In the pages that follow, we’ll show you how to better take care of it.
Let’s get started!

Table of Contents- Finding #1 Stocks PDF

Chapter 1- The Importance of Screening and Backtesting 1

Why Should I Use a Stock Screener? 1

Backtesting! 2

Chapter 2- Identifying What Kind of Trader You Are 5

Question 1: What Kinds of Stocks

Do You Want to Invest In? 5

Question 2: What Characteristics Do You Want

Your Stocks to Have? 6

Question 3: What Do You Want Your Stocks to

Do for You? 7

Chapter 3- Defining the Basic Trading Styles 9

Momentum Style 9

Aggressive Growth Style 11

Value Style 12

Growth and Income Style 12

“All Style” Style 13

Technical Analysis 14

Winning in Style 14viii CONTENTS

Chapter 4- Trading the Zacks Rank 15

The Zacks Rank versus the Market 15

About Len Zacks 17

Calculating the Zacks Rank 18

What the Rankings Mean 20

Four Factors of the Zacks Rank 24

Chapter 5- Beyond the Zacks Rank 27

Filtering the Zacks Rank 27

How Many Stocks Are Right for You? 32

Chapter 6- How to Trade the Strategies 33

Once a Month 33

Once a Week 35

Combining Holding Periods 35

Chapter 7- Winning Momentum Strategies 37

Big Money 37

Earnings Acceleration 42

Increasing Earnings 44

New Highs 46

Using New Highs for Sector and

Industry Analysis 50

Summary 53

Chapter 8- Winning Aggressive Growth Strategies 55

Small-Cap Growth 55

All-Cap Growth 61

Sizing Up the Markets 64

Zacks Rank 5 or 4 to 1 66CONTENTS ix

First Profit 68

Summary 70

Chapter 9- Winning Value Strategies 71

Value and Spark 71

R-Squared Growth 78

ROE for Your ROI 82

Cash Is King 83

Price to Cash Flow 84

Statistical Analysis of P/CF, P/E, P/S, P/B, and PEG 85

Combined Valuation Screen 94

Summary 95

Chapter 10- Winning Growth and Income Strategies 97

Growth and Income Winners 97

Growth and Income Method 1 102

Modifying Your Strategies 103

Dividend Attraction 104

Summary 108

Chapter 11- Winning “All Style” Strategies (and Other Stuff That Works) 109

Finding Growth and Value Stocks the Right Way 110

Sales and Margins 113

Relative Price Strength 115

Broker Rating Upgrades 118

New Analyst Coverage 121

Top Stocks, Top Industries 122

Combining Two Great Ways for Identifying the Best Sectors and Industries 124

Earnings Yield 125

Calculating Price Targets 127

Summary 129

Chapter 12- Applying Technical Analysis 131

Increasing Price and Volume 132

TA and FA Winners 133

3 Days Up, Price and Volume 135

Moving Averages 139

Summary 148

Chapter 13- Identifying Chart Patterns 149

Symmetrical Triangles 150

Ascending Triangles 154

Descending Triangles 158

Flags and Pennants 162

Rectangles 171

Wedges 176

Head and Shoulders 182

Inverted Head and Shoulders 184

Screening for Chart Patterns and

Consolidation Areas 192

The Pattern That Called the Market Top and Bottom in 2007 and 2009 195

Summary 198

Chapter 14- The Right Tools for the Job 199

A Good Ranking System 200

Screeners and Backtesters 201

Research Wizard: A Complete Research Tool 204

Chapter 15- Getting Started Screening and Backtesting 207

Screening for Stocks 207

Backtesting Your Screens 211

Advanced Screening and Backtesting 221

Summary 233

Chapter 16- Short Selling Strategies for Bear Markets 235

Toxic Stocks 236

Decreasing Earnings Two Years Out 239

Summary 241

Chapter 17- Managing Risk and Cutting Losses 243

Using Stop Losses 243

Diversification and Portfolio Weighting 245

Summary 247

Chapter 18- Know Your Options 249

The Option Is Yours 249

Buying Calls and Puts 252

Straddles and Strangles 258

Spreads 260

Covered Call Writing 262

Uncovered Call Writing 267

Put Option Writing 268

Stock Screening for Options 273

Summary 277

Chapter 19- Investing in ETFs 279

ETFs for Any Market and Any Direction 279

Screening for the Right Sector and Industry ETFs 281

Chapter 20- Putting It All Together 283

Disclaimer 285

Free Trials and Other Resources 287

Index 289

Reviews

“You are only as good as the stocks you trade. You can be the best professional trader in the world, but if you are in the wrong stocks, you will not make money. Here, Kevin Matras helps you find a system for finding the best stocks for you to improve your trading game.”—MIKE BELLAFIORE Cofounder of SMB Capital and author of One Good Trade

“After thirty-seven years in the technical analysis world, I have read almost every book on the subject of investing. Many are great, some are horrible, and most fall in the category of ‘it had some good points, but probably not a full book’s worth.’ I found Matras’ book to be exceptional in its thoroughness of process while offering all investors a methodology based upon sound principles and reason. This is a book every investor should read. The chapter devoted to classical chart patterns was worth the cost of the book alone.”—GREGORY L. MORRIS Chairman, Investment Committee, and Chief Technical Analyst, Stadion Money Management, and author of Candlestick Charting Explained and The Complete Guide to Market Breadth Indicators

“As a devoted chartist, I confess I wasn’t sure what I would think of a book dedicated to fundamental analysis. Having read Finding #1 Stocks, though, I’m convinced of its value. This volume takes topics that have every right to be complex and makes them easy to use and understand. The Zacks name has been one of the consistent brands in this industry for many years, and once you’ve finished reading Finding #1 Stocks, you’ll understand what makes the Zacks Ranking system tick and how it can make a big difference in your trading.”—TIM KNIGHTauthor of Chart Your Way to Profits and founder of Prophet Financial Systems

“I’ve successfully used Zacks for years as a stock screening tool. Finding #1 Stocks is a terrific explanation of how the Zacks Ranking system works and how it can be used by everyday investors to outperform the market. Even if you don’t use Zacks, the book provides an easy-to-understand, step-by-step method for identifying and investing in high-potential stocks. This is a great, commonsense guide for everyday investors.”—JEFF HIRSCHEditor and President, Stock Trader’s Almanac

About the author

Kevin Matras is a vice president at Zacks Investment Research, where he is the fundamental stock screening and technical chart patterns expert. He heads the Research Wizard Division at Zacks, which focuses on stock screening and backtesting. Matras also runs the Chart Patterns Trader service, dedicated to chart pattern analysis, and the Options Trader service, which applies his stock-picking techniques through the use of options. He has been on television and quoted in magazines, and his stock-picking articles can be found on various financial sites. Matras can also be seen weekly on Zacks Roundtable Review videos along with his popular weekly video segments Screen of the Week and Know Your Options.

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