Daniels Midland, Big Five Sporting Goods and Xyratex
CHICAGO--(BUSINESS WIRE)--April 05, 2007
Kevin Matras goes over an exciting screening strategy called 'Best
Buys'. Stocks in this week's article are Archer Daniels Midland Co.
(NYSE: ADM), Big Five Sporting Goods Corp. (NASDAQ: BGFV) and Xyratex
Ltd. (NASDAQ: XRTX). Click here for the full story exclusively on
Screen of the Week written by Kevin Matras of Zacks Investment
Here's a new screen that was created with the Research Wizard. By
popular demand, I'm excited to share it again in this article. It's a
very robust strategy in and of itself and works exceedingly well with
many of our other strategies that come loaded with the Research Wizard
-- Zacks Rank less than or equal to 2 Or
The % of Brokers Ranking the Stocks a Strong Buy/Buy greater than
or equal to 50%
(I'm looking for stocks that have a Strong Buy or Buy Rating from
Zacks or that have 50% or more of the Brokers Ranking it a Strong Buy
-- Price to Sales less than or equal to .75
(A Price to Sales Ratio of 1 means you're paying $1 for every $1
of sales the company makes. A P/S Ratio of .75 means you're paying
only 75 cents for every $1 of sales the company makes - which is a
-- ROE greater than or equal to 15
(This is net income divided by common equity and is a measure of
how good a company is being run. In other words, a company with an ROE
means that 15 cents of assets are being created for every one dollar
of shareholders equity.)
-- Current Price greater than or equal to 5
-- Average 20-Day Volume greater than or equal to 100,000
(I want to make sure it's well traded.)
-- % Rating Change over the last 4 Weeks equal to Top # 5
(This narrows the screen down to the 5 stocks (always only 5
stocks) with the biggest, (i.e. best) increase in the Average
I ran a series of separate tests over the last six-year time span
using a four-week holding period. Each run was started on a different
date to eliminate coincidence and to verify robustness.
In 2001, this screen showed an average compounded gross return of
51.4%. In 2002, it showed a 36% return. 2003 saw a whopping 91.2%
return while 2004 showed a 35.9% return. Furthermore, 2005 was 44.4%
and in 2006 the average compounded gross returns were 58.4%.
I've also been experimenting with a slightly higher percentage of
Strong Buys/Buys and have found that 60% does very well too. But
anything higher than that starts diminishing returns instead of
Give this strategy a try in your own trading and see how it can
help you pick better stocks. This strategy always only picks five
stocks per run. Here are three of them for this week (Tuesday,
ADM Archer Daniels Midland Co.
BGFV Big Five Sporting Goods Corp.
XRTX Xyratex Ltd.
(This strategy is now available in the Research Wizard in the SoW
Sign up now for your two-week free trial to the Research Wizard
and get the rest of the stocks on this list. Start trading this
strategy today. And don't forget to check out the other winning
trading strategies that come loaded with the program. Know when to buy
and when sell. It's all there. 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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Disclaimer: Past performance does not guarantee future results.
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Contact: Jim Giaquinto
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