Energizing Your Portfolio
Back in August, while the market was still putting in its correction, I wrote about a screen that identified which sector and industries were holding up the best during the recent sell off.
The idea was that the sector (and the stocks in it) that showed the greatest resiliency should be the one to breakout first. Back then it was the medical sector, and, not surprisingly, it ended up producing some spectacular picks. (The title of the article “Just What the Doctor Ordered” was derived from the fact that the best sector was the medical sector.) This time, it’s the oils-energy sector (hence the corny title).
Parameters
The screen starts out with the usual items:
- Price >= 5
- Volume (Avg. 20 Days) >= 100,000
Then I specifically screen for the sector with the greatest relative price change over the last four weeks. Basically, I’m looking for the sector that performed on average, the best in comparison to the S&P 500.
From there, I narrow that sector down to only those stocks with a Zacks Rank of a 1 or 2. (The Zacks Rank is one of the best rating systems out there, so this automatically puts the odds in my favor.)
For good measure, I also make sure that the stocks have positive earnings estimate revisions over the last four weeks for both Q(1) and F(1). (Studies show that stocks with rising earnings estimates outperform the market.)
Then I narrow that list down even more by looking for the top 20 stocks within the top sector based on the relative percent change in price over four weeks. First I looked for the best sector based on the average percent change in price over four weeks, and then I zeroed in on the best 20 stocks within that sector.
Lastly, I cull it down to the top 10 stocks within that sector’s medium-sized industry.
This screen produced 20 stocks this week; the best sector was oils-energy.
The top medium-sized industries within that sector are:
- Energy-alternative sources
- Oil machinery-services-drilling
- Oil-exploration & production
- Oil-integrated
- Oil & gas production-pipeline
This screen has produced a lot of exciting new picks. Instead of the usual three stocks I highlight in this article, here are five new top picks:
CLB Core Labs
IMO Imperial Oil
OXY Occidental Petroleum
SGY Stone Energy
SU Suncor Energy
You can open this screen up to look for the top two, three, or five sectors—or whatever you choose.
Many screeners won’t let you screen for the top sectors or industries, but in the Research Wizard you can. Now you can find the top sectors based on whatever metric you like, drill down to the best industries, and then on to the best stocks.
Picking winning stocks has never been so easy—and now you can do it too.
Sign up for your two-week FREE trial to the Research Wizard today. 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 back-testing ability of Research Wizard. You can do it! Try it today for free: 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.
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