John V.'s  Instablog

This week's results from my Super Stock Screener.  This screen is fairly wide (EPS>=45%, Sales>=25%, ROE>=10, RS>=88, Price within 20% of High) and I do have tighter screens as well.  Screening is an excellent starting point for finding winning stocks.

My thoughts:  As expected the screening results for this week showed a drop in the number of stocks from 56 down to 52.  This decrease occurs as some stocks trade below either the required percentage requirements from their peaks, the required Relative Strength (RS) rating, or some other criteria of the screen that is not being met.

Fewer stocks in the screening results means that stocks are weakening and thus thus possibly the market is weakening as well, but there is a positive outcome as well as fewer stocks on the list makes it easier to spot future winners.

The stocks that manage to stay in the screening results are usually stronger performers overall, and the history of the screen indicates that, in general, almost every big-winning stock has been listed in the results during their runs.  This is why screening is the backbone of my system and why I consider it to be such a valuable tool for finding winning stocks.


Some of the names that dropped off had potential such as Alexion Pharmaceuticals (NASDAQ: ALXN) and Illumina (NASDAQ: ILMN).  Seaspan Corporation (NYSE: SSW) fell off as well and I find this ironic because a bullish article just came out on them in Investors Business Daily.  Not the best timing as the stock appears to be weakening.


Only two new stocks appeared this week and both have been on before so we'll see if they stick around this time.  They are Veriphone Systems (NYSE: PAY) and Titan Machinery (NASDAQ: TITN), and both have interesting stories going for them so we'll see what happens.

A shrinking list of names on the screen usually means that the stocks in the market are getting weaker so that is a signal to be on your guard.  There may be bad times ahead and the list may shrink further but only time will tell if that happens.  It will definitely pay to be cautious going forward.

As always this is not a buy list but rather a starting point for doing more research.  Stocks that are new are underlined and have an Asterisk (*) next to their company name.

Stock that fell off the Super Stock Screener results from May 21st are below:

Note: to keep the screen results manageable I removed Industry Groups that I either do not believe in (Financial) or are so Commodity that I have no idea how to pick one from another (Oil&Gas).