PROFIT PICKER -Which Stocks To Pick For Good Profit
Knowing which stocks to pick for good profit becomes easy with my Profit Picker trading strategy. Take a look at the return of these three stocks. A 34.05% average gain made in one day (September 13, 2013). So how did I know which stocks to pick for good profit?
LAKE up 34.94% today!
NURO up .54% today!
I first look at which sectors are hot by going to this page on the Morningstar website.
At the time of this writing there was a display (shown below) that reveals which categories are hot. As you can see, China is doing the best for the last month, but take a look at Health. It’s a close second on monthly return, but look at that yearly return. Nice. So Health is hot right now.
Find A Hot Industry
Next I’ll zip over to Yahoo Finance’s Industry Browser to see a list of all the industries within the Healthcare sector. Here you will find many industries, which one do you select? Here is a tip that could make you a bundle. I have found the one that makes the most money is the one who supplies all the other industries.
In Healthcare you’ll find drug companies, hospitals, biotechnology, practitioners, facilities, etc. Since this is a hot sector, all these industries within that sector are booming, and they all need medical equipment and supplies. So instead of trying to guess which of the industries will be hot next, go with the industry that will supply the winner no matter which industry it is. Make sense?
So that leaves us with Medical Instruments and Supplies as well as Medical Appliances & Equipment. If you click on “Medical Instruments and Supplies” you should see a page that lists all the companies in that industry.
Now follow this thinking for a moment. When a sector gets hot, usually the best stocks rise and the rest get left behind. Then after awhile, investors feel the top stocks are too expensive. They’ve gained too much. So they start buying the laggards. Even if the company is bad, they will buy it. They just have to be in that sector. We’ve seen this recently with Real Estate and Financials.
How To Tell Which Stocks To Pick For Good Profit
So what you want to do ideally, is find which of the stocks have done worst in the past 3 to 6 months and invest in those. When the crowd comes, they will push your picks up and you’ll make some good profits.
Unfortunately the Yahoo screener doesn’t have that so I’ll use the “Price to Book Value”. I’ll list stocks that have the lowest Price to Book value first.
So click on that and rank yours, which will definitely be different that what I’m seeing at the time of this writing. But here is what I see now:
Now eliminate all the stock symbols that have a “.” in them (these are usually not tracked by most financial sites). Out of what’s left write down the top 3 stocks. I end up with SEYE, NURO, and LAKE.
Of those three I prefer a stock that trades over 100,000 shares. Click on the company name you will go to it’s profile page. Click on the Summary tab and you will find average volume. Only LAKE qualifies there. That would be my pick.
However, back in 2009, I made a video on the year’s top performing stocks (see below). If you apply what I learned there to the three above, SEYE would be also be a good pick.
Before you run with this, do some of your own testing. Good luck and hopefully you will now understand which stocks to pick for good profit. Don’t expect returns over night, but give a month or two for others to get in and push you up.