By Tom Lloyd Sr.
Recently, someone asked us to find low-priced, growth stocks, and the
quickly went through 8,000 stocks and came up with some names.
was one of them that seemed attractive. When it comes to growth, we want GARP, growth at a reasonable price.
The rules of selection were:
1) stock price under 15
2) growth stock in the top 30% of stocks
3) Seven or more analysts following the stock (to have good forecast input into the forecast models)
4) a good overall score between 3, best, and 9 (where 30 is the worst score) Note that this score evaluates fundamentals, technical and forecast data.
5) And to keep the list small, we limited the universe to stocks with options.
You can go into the StockpickerUSA.com system free trial and duplicate our search using these rules.
Coming up with the names is the easiest and fastest part of the process, but only the first step. Now comes the difficult part of doing due diligence research on the stock.
Professional portfolio managers will do an enormous amount of research on any name they come up with. They may have their own research staff in-house. They will use all of the analyst reports they can find, published by Wall Street and for which they will pay handsomely by funneling trades to brokers providing the research reports. The biggest portfolio managers, with the most money to spend for research, will get the “first call.”
The small investor cannot duplicate this kind of due diligence research. That is why the small investor must complete the process by turning to a professional financial adviser. There are many services available from discount brokers that supply such services as SP reports, Zach’s, Value Line, Morningstar, etc. But none will duplicate what is available to the professional portfolio manager with billions under management.
The small investor can do some preliminary due diligence on the Internet. First, look at a chart for BEBE (click here) just to make sure the stock is in an uptrend, hopefully coming up from a recent bottom, and has no technical sell signals on the chart.
Next, go to another chart and data service to verify chart signals and the metrics being used by fundamental and technical analysis models we use. Look for the recent analyst upgrades and price targets. Check the analyst mean
target (click here.)
Also check Yahoo
Finally, check what some of the professional portfolio managers are doing with BEBE. Yahoo provides some data on portfolio managers
And Tickerspy not only shows the portfolio managers but also whether they are buying or selling
Keep in mind that this data is old. Reading a chart will tell you what the portfolio managers are currently doing. If price is still in an uptrend they are still buying. That is why “the trend is your friend.”
Disclosure: The selection of BEBE was published to StockpickerUSA.com subscribers.
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Category: Technical Analysis