Over the weekend, I undertook the following evaluation:
I reviewed all NASDAQ stocks in the November 23, 1998 issue of Investor's Business Daily(IBD). Included were all stocks on pages B-8 through B-11 with the (IBD) "SmartSelect" corporate ratings.
The specific criteria that I applied and in descending order was:
(1) Considering most important in determining a potential stock to invest is the (sales + profit margins + r.o.e) and actual P.E.'s, I screened for stocks with ratings of "A" for the former and those carrying a P.E. no higher than 10.
(2) Using the (IBD) criteria of Accumulation/Distribution ratings of "A" and "B" indicating heavy to moderate buying, I then eliminated any company with a rank below "B".
(3) Considering (IBD's) rating of companies with EPS of 75 and above being superior earnings, I raised the level to 80 and eliminated any company with a rank below 80.
At this stage, I was left with the following companies: MASK, AABFI, MSFF, CROS, DSWLF, GMRK, LVSB, LSBX, LBFC, NAII, NVLDG, PCAR, SALT, STLY, SUMX.
(4) The final criteria that I applied was (IBD's) stipulation that stocks falling below a Relative Price Strength(RS) of 70 was showing weaker or laggard performance for that stock.
Using this final step, I was left with only SALT and SUMX. Therefore, to break the tie, I looked at any recent action that the respective companies had taken toward their stock. I could find no action taken by SALT, but in the case of SUMX, I found that they had recently implemented a buy-back plan and insiders had been purchasing the SUMX stock.
Therefore the tie-breaker goes to SUMX, and IMO it makes a very attractive stock to consider for purchase. |
