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Jim Van Meerten
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Jim Van Meerten is an advisor to Marketocracy Capital Management and writes on financial subjects here and on Barchart Portfolio Blogs. He earned a BS in Accounting and Business Administration from Berry College; a Juris Doctorate from the Woodrow Wilson School of Law; and attended... More
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Marketocracy Capital Management
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  • The stock selection process 0 comments
    Nov 11, 2009 9:38 AM | about stocks: EW
    Today's addition to my Wall Street Survivor portfolio is Edwards Life Sciences (EW) a leader in advanced cardiovascular disease treatments, the number-one heart valve company in the world and the global leader in acute hemodynamic monitoring. Headquartered in Irvine, Calif. EW focuses on specific cardiovascular diseases including heart valve disease, peripheral vascular disease and critical care technologies. Their global brands, which are sold in approximately a hundred countries, include Carpentier-Edwards, Cosgrove-Edwards, FloTrac, Fogarty, LifeStent, PERIMOUNT Magna and Swan-Ganz. Edwards Lifesciences, Carpentier-Edwards, Cosgrove-Edwards, Fogarty, PERIMOUNT Magna and Swan-Ganz are trademarks of Edwards Lifesciences Corporation and are registered in the United States Patent and Trademark Office. LifeStent is a trademark of Edwards Lifesciences AG and is registered in the United States Patent and Trademark Office.

    I'd like to go through the process I use to select the stocks I add to my portfolio. First I look for the top ten stocks that are hitting new highs and use BarChart's stock screener for that. After I filter the stocks for other criteria and get my number one pick I go out on the Internet to sources I'm comfortable with to see if they agree with me. If they do then I'll add it to one of my portfolios. I'm not a contrarian, that's why my newsletter is called Financial Tides; I want to swim with the tide not against it. If I can't find a stock that makes it all the way through my screening process, I buy nothing that day. Let me go into detail on how this process works.

    First I go to BarChart's 20 day new high -- new low list and sort for frequency. I only want the top 10 stocks that are trading at least 100K shares a day and have hit new highs more that 50% of the last 20 trading sessions. Next I take those 10 and see how they perform against the 13 technical analysis indicators that BarChart uses and eliminate all stocks not getting at least an 80% buy rating. I look to see if they have had positive price performance in the last 5 day to weed them down further. I then look at a chart that plots the price against the 20, 50 and 100 day moving averages to see if there is consistent price performance. I pick the one I like best and then research it.

    I'll look at the news on Yahoo Finance, the analyst reports, the Wall Street Survivor check list, the Motely Fool CAPS ratings. I'm not looking for them to agree with me, I'm making sure they don't disagree with me. If I have a stock that I have chosen for recent technical price performance reasons that suddenly has a whole lot of negative press out there, I'd be a fool to think it will continue upward. I realize that the Wall Street analysts have a very poor record at finding winners but I also realize that if they turn out reports that a stock is a loser, then all their brokers will be calling their clients with sell recommendations. That stock should go down.

    Remember, I don't recommend swimming against the tide. Tomorrow I'll go into more detail on Edwards Life Sciences and why I added it to my Wall Street Survivor portfolio.

    Disclosure : I do not hold any positions in Edwards Life Sciences (EW) at the time of this publication

    Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below at email FinancialTides@gmail.com
    Themes: investing strategies Stocks: EW
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