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Sixty percent method is devoted to fundamental analysis because I want to buy only really great companies that have unique new products or superior services. I am looking for the true market leaders companies that are #1 in their particular fields, companies that are superior to their coopetition of have little true competition. Once you determine that you are cooperating in an up trending general market, her are the factors you shod consider.
Is the company’s current quarterly earnings per share up at least 25%? Are the percentage increases in profits accelerating compared to recent quarters? Does it have six to twelve quarters of significant earnings increases up 50%, 100%, even 200% or more? Is the next quarter’s consensus earnings estimate worthwhile amount? Have earrings in the past few waters been higher than expected? If it is a growth stock, is each of the last three years of earnings up an average of 25% or more per year? Is the company’s earnings per share rating 80 or higher?
If it is a turnaround stock, does it have two quarters of strong earnings increases or one quarter that it up so much that the twelve months earnings per share are back to their old peak? If two or more quarters have turned up are the tailing twelve month earnings near or above the peak of the prior couple of years? How much are the consensus earnings estimates up for the next two years?
Does the company have six to twelve quarters of strong sales growth? And has that growth rate accelerated in recent quarters?
Is the current quarter’s tax profit margin at or close to its peak? Has there been a general trend of profit margin improvement over many quarters? Are the company’s margins among the best in this industry?
Is the annual pretax profit margin 18% or more?
Is the current quarter’s after tax profit margin at or close to its peaks?
Is the annual pretax profit margin 18% or more?
Is the return on equity 20% to 50% or more?
Is its Sales + Profit Margins + ROE Rating A or B?
Does the companies’ management own the stock?
Is the stock in quality price range? Quality comes at $16 to $150 for Nasdaq stocks and $20 and $20 and above for NYSE stocks.
Is the stock part of a historically wining industry group such a retail, computers, technology, drug and health care or leisure and entertainment?
What board economic sector is the market favoring?
Does the company’s product a save money, solve a problem or save time with the technology?
Is the company’s backlog of unfilled orders expanding?
Have one or two of the smart, better performing mutual funds bought the stock recently?
Do you really understand and believe in the company’s business?
You want an increase of 50% or more in trading volume on the day you begin buying with the stock braking out of a sound base.
Is its relative price strength rating 80 or more? And is the real active strength line on the chart in a definite uptrend?
Portfolio management. Keep and try to add to your best performing stocks and reduce r sell your most acting ones. And remember, stocks in sound base patterns and near new highs in price are better than stocks nearing or at now low prices.
Check along term monthly chart to see if the stock is also emerging out of a long term base over a number of years.
