The last week or two has been a tough market. And even though I remain positive on the market, here’s a screen that doesn’t need a bull market to succeed.
In fact, in this week’s screen, 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 <= 2
(Only Buys and Strong Buys)
- Avg. Broker Rating = 1
(Since Brokers are typically bullish ‘everything’, they have to be fully on board.)
- Relative % Price change – 12 weeks >= 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 >= 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 >= .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 >= 5
(They all have to be trading at a minimum of $5 or higher.)
The Results
I ran a series of tests using a 4 week holding period over the last 5 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%.
There are 17 stocks that made it thru this week’s screen (3/6/07).
| Company | Ticker | Zacks Rank | Avg. Brkr. Rating | % Ch. Price 12 Wks. Rel. to S&P 500 | % Ch. Price 12 Wks. | Curr. Price / | Current Price |
| FOOD | |||||||
| Overhill Farms | OFI | 2 | 1 | 94.36% | 89% | 0.84 | $5.50 |
| AUTOS-TIRES-TRUCKS | |||||||
| Amerigon Inc | ARGN | 2 | 1 | 16.6% | 13.39% | 0.97 | $11.18 |
| METALS-NON FERROUS | |||||||
| Brush Engineered | BW | 1 | 1 | 20.38% | 17.07% | 0.86 | $41.91 |
| POLLUTION CONTROL | |||||||
| Ceco Envirnmntl | CECE | 2 | 1 | 61.37% | 56.92% | 0.82 | $14.17 |
| COMPUTER-OFFICE EQUIPMENT | |||||||
| Echelon Corp | ELON | 2 | 1 | 19.02% | 15.74% | 0.9 | $9.19 |
| COMPUTER SOFTWARE-SERVICES | |||||||
| I2 Technologies | ITWO | 1 | 1 | 23.14% | 19.75% | 0.88 | $23.53 |
| Synchronoss Tec | SNCR | 2 | 1 | 43.13% | 39.19% | 0.91 | $17.12 |
| ELECTRONICS | |||||||
| Cpi Intl Inc | CPII | 2 | 1 | 31.17% | 27.56% | 0.91 | $17.59 |
| TELECOMMUNICATIONS EQUIPMENT | |||||||
| Globecomm Systm | GCOM | 2 | 1 | 20.84% | 17.52% | 0.97 | $11.07 |
| TELECOMMUNICATIONS SERVICES | |||||||
| Orbcomm Inc | ORBC | 2 | 1 | 58.81% | 54.44% | 0.86 | $12.00 |
| AEROSPACE-DEFENSE | |||||||
| Ducommun Inc De | DCO | 2 | 1 | 15.19% | 12.01% | 0.97 | $25.55 |
| BANKS & THRIFTS | |||||||
| Utd Western Bcp | UWBK | 2 | 1 | 19.03% | 15.75% | 0.97 | $23.15 |
| INSURANCE | |||||||
| Amerisafe Inc | AMSF | 1 | 1 | 32.82% | 29.16% | 0.95 | $17.63 |
| TRANSPORTATION-AIR | |||||||
| Copa Hldgs Sa-A | CPA | 2 | 1 | 17.33% | 14.1% | 0.8 | $52.44 |
| TRANSPORTATION | |||||||
| Dryships Inc | DRYS | 1 | 1 | 37.79% | 33.99% | 0.98 | $20.55 |
| Ultrapetrol Ltd | ULTR | 1 | 1 | 29.52% | 25.95% | 0.86 | $16.55 |
| BUSINESS SERVICE | |||||||
| Sm&A | WINS | 2 | 1 | 26.59% | 23.1% | 0.94 | $7.30 |
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://researchwiz.zacks.com
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.
