In a hostile market like we're seeing today, some investors look for bargains (value investors), while others look for winners showing relative strength (momentum investors). This list is for those in the latter group.
The Screening process
Starting with a universe of 1,000 stocks included in the NYSE Composite Index, I first screened for those with the best performance over the last week, YTD, 1-year, and 3-years. I averaged each of these performance numbers to get a combined performance score that gave equal weight to each time period. These are stocks that are showing strong price momentum over these time frames. I took the top 100 stocks that passed this screen.
Next, I screened for YTD performance. Again I took the top 100 stocks that passed. Of the 1,000 stocks in my sample, only 24 passed both screens.
Next, I looked at how each of these 24 stocks were rated by analysts, using both fundamental and technical data. This further reduced the list to 19 stocks that were rated buy, or strong buy.
Finally, I eliminated the stocks that had low trading volume, or were the subject of buyout speculation. What I ended up with is a list of 15 stocks that are strong enough to withstand the punishment handed out by Mr. Market over the past two weeks.
Some of these names surprised me, like Sony (NYSE:SNE) for instance. And New York Times Co. (NYSE:NYT), which President Trump continually describes as "the failing New York Times." Other names like Boeing (NYSE:BA) and Raytheon (NYSE:RTN) make more sense. They will both benefit from a military buildup, which is now assured by the recently passed budget deal.
So there you have it. A list of strong stocks to consider for adding to your portfolio. As always, treat this list as a watch list, not a recommended buy list. Always do your own due diligence before entering into any trade.
Don't forget to check out my MarketPlace trading strategy, the Zen Top 7. It's holding up well in this market, which is why I did the research for this article.
Disclosure: I am/we are long BA FCFS MOD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Nothing in this article should be considered personal investment advice. Always do your own research or consult your adviser before making any trades.
Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.