For 09/25/2015 issue, please see the following article: http://seekingalpha.com/article/3539906-value-growth-momentum-winning-stocks-as-of-09-25-2015
This screen is based on an article by Marc Reinganum, titled “Investment Characteristics of Stock Market Winners,” which examined the common traits of a group of winning stocks. This study tries to identify qualities of winning stocks and translate it into a quantitative value/growth/momentum screen. The study examined 222 stocks highlighted as winners in a publication by William O’Neil & Co. titled “The Greatest Stock Market Winners: 1970-1983.” Nine traits were developed that helped to identify the winners:
- Price-to-book-value ratio less than 1.0.
- Accelerating quarterly earnings.
- Positive 5-year growth rate.
- Positive pretax profit margin.
- Relative strength rank of at least 70.
- Relative strength rank of the stock in the current quarter is greater than the rank in the previous quarter.
- O’Neil Datagraph rating of at least 70.
- Stock selling within 15% of its maximum price during the previous two years.
- Fewer than 20 million common shares outstanding.
Based on 2014 results, Adept Analyst’s Winning Stocks portfolio had an average number of holdings was 11 and turnover was 59.1%.