Finding #1 Stocks: Screening, Backtesting and Time-Proven Strategies (The Zacks Series) [Hardcover]

Kevin Matras (Author)

Book Description

Publication Date: April 26, 2011 | Series: The Zacks Series (Book 1)

Practical trading tools and techniques developed by Zacks Investment Research

While there are many stock trading systems on the market today, that use a variety of different approaches and indicators, the approach used by Zacks Investment Research is built around the number one driver of stock prices: company earnings.

Based on Zacks Research Wizard product, this book provides you with market beating stock selection techniques and advice on how to build your own stock selection system. This practical guide discloses several trading methods that have outperformed the market for a long period of time and shows you how to screen stocks and develop selection criteria to build various types of stock portfolios, such as aggressive growth; growth and income; momentum; and value.

• Highlights several of Zacks trading methods that have outperformed the market for extended periods of time
• Discusses how to create customized systems incorporating elements of the Zacks approach with other types of fundamental and technical data
• Includes a 30-day free subscription to Zacks Research Wizard software

Written with the serious investor in mind, Finding #1 Stocks will put you in a better position to excel in today's dynamic markets.

Editorial Reviews

From the Inside Flap

Learning new and better ways to pick more profitable stocks is one of the quickest ways to improve your trading, no matter what level of success you've already achieved. Nobody understands this better than author Kevin Matras, a vice president at Zacks Investment Research, who is the fundamental stock screening and technical chart patterns expert there.

For the past two decades, Zacks has been helping traders and investors beat the market with independent analysis and innovative products such as the Research Wizard, their stock-picking and backtesting program, and the Zacks Rank, a stock rating system whose Strong Buy recommendations have generated an average annual return of over 27% since 1988.

Now, in Finding #1 Stocks, Matras shows you how to implement the proven trading techniques used by Zacks—as well as some of his personal favorites—in your own trading. Focusing on earnings estimates and stock analysis, this reliable resource skillfully details how to create your own stock-picking screens and trading strategies and how to test them to ensure they work. Throughout the book, you'll be introduced to practical and actionable strategies that can help you identify stocks with the highest probability of success, to maximize your returns and minimize your overall risk.

Along the way, you'll gain important insights on what you really need to succeed, including:

• Identifying what kind of trader you are or want to be

• Understanding the basic trading styles—momentum, aggressive growth, value, and growth and income—and figuring out which is the best fit for you

• Creating customized strategies that combine elements of the Zacks approach with other types of fundamental and technical data

• Managing your risk and paying attention to your portfolio

• And much more

Written with savvy traders and investors in mind, Finding #1 Stocks will put you in a better position to excel in today's dynamic markets.

From the Back Cover

Praise for Finding #1 STOCKS

"You are only as good as the stocks you trade. You can be the best professional trader in the world, but if you are in the wrong stocks, you will not make money. Here, Kevin Matras helps you find a system for finding the best stocks for you to improve your trading game."—MIKE BELLAFIORE Cofounder of SMB Capital and author of One Good Trade

"After thirty-seven years in the technical analysis world, I have read almost every book on the subject of investing. Many are great, some are horrible, and most fall in the category of 'it had some good points, but probably not a full book's worth.' I found Matras' book to be exceptional in its thoroughness of process while offering all investors a methodology based upon sound principles and reason. This is a book every investor should read. The chapter devoted to classical chart patterns was worth the cost of the book alone."—GREGORY L. MORRIS Chairman, Investment Committee, and Chief Technical Analyst, Stadion Money Management, and author of Candlestick Charting Explained and The Complete Guide to Market Breadth Indicators

"As a devoted chartist, I confess I wasn't sure what I would think of a book dedicated to fundamental analysis. Having read Finding #1 Stocks, though, I'm convinced of its value. This volume takes topics that have every right to be complex and makes them easy to use and understand. The Zacks name has been one of the consistent brands in this industry for many years, and once you've finished reading Finding #1 Stocks, you'll understand what makes the Zacks Ranking system tick and how it can make a big difference in your trading."—TIM KNIGHTauthor of Chart Your Way to Profits and founder of Prophet Financial Systems

"I've successfully used Zacks for years as a stock screening tool. Finding #1 Stocks is a terrific explanation of how the Zacks Ranking system works and how it can be used by everyday investors to outperform the market. Even if you don't use Zacks, the book provides an easy-to-understand, step-by-step method for identifying and investing in high-potential stocks. This is a great, commonsense guide for everyday investors."—JEFF HIRSCHEditor and President, Stock Trader's Almanac

See all Editorial Reviews

Product Details

• Hardcover: 300 pages
• Publisher: Wiley; 1 edition (April 26, 2011)
• Language: English
• ISBN-10: 0470903406
• ISBN-13: 978-0470903407
• Product Dimensions: 6.4 x 1.1 x 9.4 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #546,353 in Books (See Top 100 in Books)

More About the Author

Kevin Matras, Vice President at Zacks Investment Research, is the fundamental stock screening and technical chart patterns expert. He heads the Research Wizard Division at Zacks, which focuses on stock screening and backtesting. Matras also runs the Chart Patterns Trader service, dedicated to chart pattern analysis, and the Options Trader, which applies his stock-picking techniques with winning options strategies. He has been on television and quoted in magazines, and his stock-picking articles can be found on various financial sites. Matras can also be seen weekly on Zacks Roundtable Review videos along with his popular weekly video segments of Screen of the Week and Know Your Options on Zacks.com.

Most Helpful Customer Reviews

56 of 67 people found the following review helpful

1.0 out of 5 stars Offensive September 7, 2011

By Zachary Turner

Format:Hardcover|Amazon Verified Purchase

The sales pitch in this book borders on nauseating. I get that lots of authors do this with stock / investing books and i have somewhat come to expect it, but this book just takes it to an entirely new level.

You cannot run ONE SINGLE SCREEN in this book without a subscription to Zack's Premium service, which as you guessed, costs $$$. Every single screen requires the Zack's Rank, which is proprietary and non-existent outside of their paid service.

In order to actually backtest anything, you also need Zack's Research Wizard, another service -- this one around $1,000/yr.

And on the subject of backtesting, let's talk about offensive. Practically every one of these screens comes with backtesting results, and you know what the results are? The results are that the screens in this book are generating returns of upwards of 80,000% in some cases. Yes you heard me right -- EIGHTY THOUSAND PERCENT. If this isnt a cheap trick to lure in the fresh meat to buy these obnoxious services then I don't know what is. Yea, sure, there are the obligatory disclaimers like "These tests do not take into account slippage and other factors, so your results may differ significantly." Oh wow, ya think? This is unacceptable and sleazy at best, offensive at worst, and it is a grotesque illustration of luring people in on false hopes. Advice to the author - instead of saying in metaphorical fine print "This test was completely and utterly useless", here's a crazy idea. -- MAKE A TEST THAT ISNT USELESS. Whatever you need to "account for", account for it.

To top it all off, I even question the legitimacy of these reviews since the very first 5 star review appeared on exactly the date of publishing and is not a verified Amazon purchase.

This book is broken.

19 of 21 people found the following review helpful

2.0 out of 5 stars Wildly Unrealistc Screening Results December 23, 2011

By Liberty4all VINE™ VOICE

Format:Hardcover

Having recently reviewed a book on investing anomalies by Mitch Zacks and given it four stars for its honest and realistic view of harnessing anomalies for stock portfolios, its ironic that I have to give two stars to this book by another Zacks employee.

One has to keep in mind while reading this that it is first and foremost a marketing tool for Zacks' services. In order to entice someone to try the services the author would likely present some wildly profitable backtested screens to seduce you into trying their services and that's exactly what happens here. Some of the screens claim to achieve compounded results of nearly 70% per annum over a ten year period! Of course in real-life this is completely unachievable. The reason I say they are unachievable is because many of them involve buying and selling a new list of stocks every week. The costs of commissions and far more crucially, the bid/ask spread will eat into the actual results so severely that I wouldn't be shocked if the total anomaly benefit is wiped out by the total trading costs.

What prevented me from giving it just one star is the fact that the author often reminds the reader that these results don't take commissions, slippage and bid/ask spreads into account. However and crucially, nowhere in the book does the author even attempt to give the reader any idea of how much these factors will detract from performance. I have no doubt that the author has a fairly good idea of what these figures are, but if he presented them, the magic trick would be revealed for what it is; sleight of hand.

Do we have any actual portfolio(s) we can examine to see how the Zacks screens perform in real life? Not exactly, but Zacks does manage a few mutual funds. Granted, the funds are not managed by the author nor do they use the same strategies mentioned in the book, but let's face it, if Zacks could achieve anywhere near the performance documented in this book it's safe to assume they would use the strategies. Sadly, for the five years from 1/1/06 to 3/31/11, their All-Cap Core fund (CZOAX) would have grown from an initial investment of $10,000 to $11,983 compared to $12,171 for the Russell 3000. As such, not only did they come absolutely nowhere near achieving the wild figures claimed in this book, but they didn't even beat their benchmark index!

Finally, there is also a long section on technical analysis that seems quite out of place. The author shows some screens that duplicate some TA, but suspiciously includes not a single backtested result for any of these screens. But again, this is primarily a marketing book so the point is to sell the product, not necessarily clearly demonstrate the truth. If you want to buy a Zacks book, go for the Mitch Zacks "Little Book" instead.

31 of 45 people found the following review helpful

5.0 out of 5 stars Finding Great Stocks Has Never Been Easier April 26, 2011

By ValueGuy

Format:Hardcover

I have been a long time reader of Kevin Matras' on Zacks.com. His Screen of the Week articles have been a consistent source of great investment strategies and top picks. So when I heard that he wrote a book on stock screening, I knew I had to get a copy. And I am so glad I did.

This is a breakthrough work on how to make stock screening accesible to the average investor. Yet still provide advanced ideas for long time screeners like myself.

Long story short, there is simply no way that someone can read Finding #1 Stocks without getting profitable investment ideas that will pay for the book many times over.