This week’s screen is just great, so I’m going to get right into it. No witty play on words to tie it into recent events or anything like that. Just the screen and how it’s done.

I created the screen earlier this year. It’s an exciting screen that comes loaded with the Research Wizard program. It has shown great results historically and presently, with a fantastic reward to risk ratio.

The Results

I ran a series of tests using a 4-week holding period from 2000 through 2007. And I used the Robustness Analysis Checker in the Research Wizard’s Advanced Backtester to verify its robustness and eliminate coincidental performance.

The average total compounded return over the last 8 years (2000 through 2007) is over 4,128%. That translates to an average compounded annual growth rate over 58.5% a year.

2007

As impressive as a 58% return is, the strategy surpassed those numbers in 2007, putting in an average compounded annual growth rate of 76.3%.

2008

What about 2008? So far, it’s YTD (through 8/8/08) average total compounded returns are 24.3% compared to the market’s -7.7%.

Parameters

• Zacks Rank = 1
  (The Zacks Rank is one of the best rating systems out there, with its Zacks #1 Ranks showing an average annual return of 30% a year since 1988.)
• Current Price / 52 Week High >= .80
  (This makes sure the stocks are trading within 20% of their 52 week highs. In bull markets or bear markets – this is a great way of finding strength.)
• PEG Ratio <= 1
  This makes sure the investor isn’t overpaying for future growth. The lower the PEG ratio, the less you’re paying for each unit of future growth.
• Price to Sale ratio <=3
  (While a lower P/S ratio is generally thought to be better than a higher P/S ratio, the cut off at 3 helps exclude extreme outliers while at the same time giving enough room to ride the momentum of the stocks being found. (See below.)
• % Change in Price over 12 Weeks – Top # 7
  (In other words, after all of the other items have been met, I’m narrowing the list down to the top 7 stocks with the best % price change over the last 12 weeks.)

Here are 3 of the 7 stocks that made it though this week’s screen (8/18/08):

KNL Knoll, Inc.

KNDL Kendle International, Inc.

ATNI Atlantic TeleNetwork, Inc.

Get the rest of the stocks on this screen and start following this strategy in your own portfolio. This strategy comes preloaded with the Research Wizard and is called: bt_sow_momentum_method1. Sign up now for your free trial to the Research Wizard and start using it today:

Click Here for your free trial of the Research Wizard

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

“ATNI” Free Stock Analysis: Buy? Sell? Hold?
“KNDL” Free Stock Analysis: Buy? Sell? Hold?
“KNL3″ Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

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