Stock Picking Process
Our Objective
To reduce the universe of all possible stocks in the market to the top 25
stocks that provide a high probability of success.
Master List Top 400 Stocks
Scoring Process
Final List TOP PROBABILITY STOCKS
Popular Lists
Ultimate List Top 100 Stocks
Analyst FavoritesCategory
Value Category
Growth Category Sentiment
Category
Second Screen
Quality Category
Screen-Based List Current List
First Screen
INVESTING UNIVERSE
400
Investing Universe10,000+ Stocks
25 Stock Stars
Ultimate List100 Stocks
100
Master List400 Stocks
INVESTING UNIVERSE
First ScreenThree Evaluation Lists
Current List:- Current Nominees- Personal Nominees
Screen-Based List:- Value Screen- Growth Screen- Momentum Screen
Master ListTOP 400 Stocks
Popular List:- Top 50 stocks IBD- Top 100 stocks VL- Top 36 stocks SS- Top 37 stocks MS- Top 50 stocks B
Top 100 Stocks: Investors Business Daily
• The IBD 50 is a list of 50 top-rated growth stocks in IBD’s database with top fundamentals showing strong relative price strength in the market.
• Criteria to pick stocks:– EPS Rating– Relative Price Strength– Return on Equity– Management Ownership
INVESTING UNIVERSE
First ScreenThree Evaluation Lists
Current List:- Current Nominees- Personal
Nominees
Screen-Based List:- Value Screen- Growth Screen- Momentum Screen
Master ListTOP 400 Stocks
Popular List:- Top 50 stocks IBD- Top 100 stocks VL- Top 36 stocks SS- Top 37 stocks MS- Top 50 stocks B
SCREEN-BASED LIST
Investment Style:VALUE Screen Tests
Investment Style:MOMENTUM Screen Tests
Growth Screen 2
Comparative & Financial
Strength
Stock Screener
Growth Screen 1
Relative Growth
Value Screen 1
Relative Value
Value Screen 2
Comparative Value & Growth
ValueScreen 3
Contrarian Opportunities
Growth Screen 3
Comparative & Sustainable
Growth
Momentum Screen 2
Moving Average & Behavioral
Momentum Screen 3
Relative Momentum
Investment Style:GROWTH Screen Tests
Momentum Screen 1
Relative Strength
Stock Screener Stock Screener
Screen-Based Tests *
*The formulas have been altered to protect Proprietary Information
1. P/E Ratio <= Indy. Avg. P/E2. Price/Sales <= Indy. Avg. P/S3. TTM ROE > Indy. Avg. TTM ROE4. TTM ROE > 05. 5 y Avg. ROE > 5 Y Indy. Avg. ROE6. LT Debt/Equity ratio <= Indy. Avg. LT Debt Ratio7. Price/Book <= 38. EPS Growth Est. > Indy. Avg. EPS Growth Est.9. Y1 EPS Est. Growth > 0
Value Screen 2: Comparative Value
FIELDOPERATO
R COMPARE TO: STOCKSP/E Ratio <= Indy. Avg. P/E 2190
Price/Sales <= Indy. Avg. P/S 3581TTM ROE > Indy. Avg. TTM ROE 4464TTM ROE > 0 5909
5 Y Avg. ROE > 5 Y Indy. Avg. ROE 3452LT Debt/Equity
Ratio <=Indy. Avg. LT
Debt/Equity Ratio 3864
Price/Book <=Average Price/Book
Ratio 5459
EPS Growth Est. >Indy. Avg. EPS Growth
Est. 12361Y EPS Est.
Growth > 0 832
Screen Results: Value Screen 2
7 COMPANIES MET THE CRITERIA: AS OF September 1, 2012 COMPANY NAME SYMBOL SECTOR3SBio Inc. (ADR) SSRX Health Care
Assurant, Inc. AIZ FinancialBaker Hughes Incorporated BHI Energy
G-III Apparel Group, Ltd. GIII Consumer CyclicalHalliburton Company HAL Energy
Medicines Company, The MDCO Health CareWellCare Health Plans WCG Health Care
Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lee Johnson Capital Management, LLC (LJCM). LJCM is an independent Registered Investment Advisor and is not affiliated with Triad Advisors.
INVESTING UNIVERSE10,000 + Stocks
Master List TOP 400 Stocks
First Screen
Second Screen
Analyst FavoritesCategory:
1.Most Repeated Stocks
Value Category:1.Catching Up Stocks
Quality Category:1.Industry Leaders2.Fastest Turnover
Growth Category:1.Historical comparison2.Industry
Comparison
Sentiment Category:1.High P/E Multiples
2.Institutional Ownership
Second Screen
Master List Top 400 Stocks
Second Screen*
*The formulas have been altered to protect Proprietary Information
Third Screen
Ultimate List: Top 100Scoring Process:
- Growth Score- Profitability Score- Financial Health Score- Momentum Score
Stock Stars ListTOP PROBABILITY STOCKS
As of August 31, 2012 - Subject to change.
September 2012 Stock PicksTOP 25 STOCKS September-12
RANK TICKER NAME SECTOR INDUSTRY SCORE1 TFM Fresh Market Inc, The 09 - Services 0957 - Retail (Grocery) 79.392 TJX TJX Companies, Inc., The 09 - Services 0945 - Retail (Apparel) 78.723 CF CF Industries Holdings, Inc. 01 - Basic Materials 0103 - Chemical Manufacturing 78.064 PETM PetSmart, Inc. 09 - Services 0963 - Retail (Specialty Non-Apparel) 77.575 RAX Rackspace Hosting, Inc. 10 - Technology 1036 - Software & Programming 77.306 ADS Alliance Data Systems Corporat 07 - Financial 0703 - Consumer Financial Services 77.177 RMD ResMed Inc. 08 - Health Care 0812 - Medical Equipment & Supplies 76.778 ALXN Alexion Pharmaceuticals, Inc. 08 - Health Care 0803 - Biotechnology & Drugs 76.559 ROST Ross Stores, Inc. 09 - Services 0945 - Retail (Apparel) 76.48
10 AAPL Apple Inc. 10 - Technology 1006 - Computer Hardware 76.3911 ULTA Ulta Salon, Cosmetics & Fragra 09 - Services 0963 - Retail (Specialty Non-Apparel) 75.82
12 EL Estee Lauder Companies Inc05 - Consumer Non-Cyclical 0521 - Personal & Household Products 75.32
13 GILD Gilead Sciences, Inc. 08 - Health Care 0803 - Biotechnology & Drugs 75.1814 AGU Agrium Inc. (USA) 01 - Basic Materials 0103 - Chemical Manufacturing 74.8615 HFC HollyFrontier Corp 06 - Energy 0609 - Oil & Gas Operations 74.7616 ESRX Express Scripts Holding Co 09 - Services 0954 - Retail (Drugs) 74.5317 TSCO Tractor Supply Company 09 - Services 0960 - Retail (Home Improvement) 74.0918 WDC Western Digital Corp. 10 - Technology 1021 - Computer Storage Devices 74.0319 EBAY eBay Inc 09 - Services 0948 - Retail (Catalog & Mail Order) 73.4920 NEU NewMarket Corporation 01 - Basic Materials 0103 - Chemical Manufacturing 73.3821 SWI SolarWinds Inc 10 - Technology 1036 - Software & Programming 72.9122 CRUS Cirrus Logic, Inc. 10 - Technology 1033 - Semiconductors 72.7823 CTB Cooper Tire & Rubber Company 04 - Consumer Cyclical 0436 - Tires 72.2924 SCSS Select Comfort Corp. 04 - Consumer Cyclical 0421 - Furniture & Fixtures 71.9725 UTHR United Therapeutics Corporatio 08 - Health Care 0803 - Biotechnology & Drugs 70.68
September 2012 Stock Picks
01 - Basic Materials12%
04 - Consumer Cyclical
8%
05 - Consumer Non-Cyclical
4%
06 - Energy4%
07 - Financial4%08 - Health Care
16%
09 - Services32%
10 - Technology20%
Sectors in Portfolio
September 2012 Stock Picks
25%
13%
13%25%
13%
13%
Service Industry in Portfolio 32%
0942 - Restaurants0906 - Broadcasting & Cable TV0951 - Retail (Department & Discount)0945 - Retail (Apparel)0960 - Retail (Home Improvement)0948 - Retail (Catalog & Mail Order)0963 - Retail (Specialty Non-Apparel)0954 - Retail (Drugs)0957 - Retail (Grocery)
Process is dynamic but we are not “traders”
Buying and selling designed to follow trends
Our Stock Selection Discipline