Share Buyback Programs A company purchasing back its shares tends to increase the stock price for a couple of reasons. First, it shows that the firm and its employees are confident in the direction the company is heading. Second, it cuts down on the shares available for investors to purchase, driving the price up through restricting supply.…
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Green Flags Now that we’ve gone over red flags, it’s time to look at the other side of the equation and learn about green flags. In our previous article, we discussed that red flags don’t necessarily mean that an investment is going to lose money. Green Flags are the polar opposite from a red flag, but it still doesn’t guarantee anything.…
With the publishing of our Synopsis with red flags article, I thought it was time to discuss what exactly a red flag is and why they should be looked for when identifying and eliminating potential investments. At its core, a red flag doesn’t mean that the investment is bad. It just means that you are more likely to lose money on the long position than you are to make a profit.…
I’m not a big technical trader. That being said, a lot of people in the information age are, and because of that we have been sure to include a number of technical indicators within the Equities Lab system. One such indicator, the relative strength index(RSI), is extremely common among technical analysts, and I think it is time to put the RSI indicator to the test.…
In the past two years of using Equities Lab, I have never stopped experimenting. However, at some point along the way I found a few indicators that I trust and use more than others—essentially using those variables whenever I need to analyze a strategy. This is a time-consuming process, where you have to replot every time you create a new strategy, so we built a feature that allowed you to turn this: Into this: All with just a simple press of a button.…
Why it’s hard to Trust Technical Analysis Over this past month or so we‘ve been writing a lot of articles that are very pro-technical analysis. Personally, I was fascinated by technical analysis when I first started investing, but I have to say, my tastes have changed. Either way, our most recent featured screen is actually based off of the SCTR designed by StockCharts, and it works amazingly.…
SCTR – Technical Analysis The SCTR no longer gets the performance pictured here, even when backtested on the dates shown. This article is retained as a warning for why we no longer allow comparisons between split-adjusted Closing prices and constants, or ranking of split adjusted closing prices. The stocks with higher split adjusted closes in the past turned out to have lower SCTR scores. …
Is Short Interest a Good Indicator? In Equities Lab, if you subscribe to our professional level, you have the ability to access certain fields that aren’t available to our more basic membership levels. One such field is the short interest that is held in companies across the market, and it was this field that got me thinking.…
Technical Analysis – Average True Range It’s no secret that, personally, I’m not the biggest fan of technical indicators. That being said, while testing Equities Lab most recent release I seem to have stumbled across an operator that consistently improves the performance of every screen that I use it with. What exactly is the Average True Range indicator?…
Standard deviation across all stocks — Chart that raw and you get a bunch of spikes. Turns out if you inverse it (1/stddev) and plot the max of that over a time period, you get something interesting. Looks to me that if this weird blue line goes down, be careful until it goes up.…
Summary: Passes multiple green flags, indicating long term growth. Deep Value with a piotroski score of 8 and an analysis score of 7 Consistently decreases the number of shares outstanding in the marketplace. About the Company: In the words of yahoo finance, NVR(NASDAQ: NVR) “operates as a homebuilder in the United States.…
Summary points Ranked an average rating of BUY by multiple analysts http://www.marketwatch.com/investing/stock/incy/analystestimates Has increased over 500% in the past three years. Volume has more than doubled over the past twenty days Incyte(NASDAQ:INCY), in the words of yahoo finance, “ focuses on the discovery, development, and commercialization of proprietary therapeutics primarily for oncology.…
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Biotechnology is one of the fastest growing industry, returning over 200% in the past five years. However, a lot of these gains come from smaller companies that “hit it big” when their treatment successfully makes it through trials. So the question then becomes: When buying bio, do you focus on the small fish, or the whales?…
I'm happy to say that we're encouraging university classrooms to use Equities Lab in their classwork. Here's an example of some of the work that has resulted. Notice how well the long/short strategy does… It's been reprinted, unedited, other than some (partial) attempts to format what used to be a Word Document for WordPress.…