In the summer of 2010, we built the ST50 list for three main reasons:
1) Create a list of current market leaders that are likely to outperform substantially the market averages. We were not happy with the existing momentum products at the time and looked for a way to simplify our research process, while improving the odds of finding the next big market winners. We looked at the best performing stocks in the past in different time frames – 3, 6 and 12 months. We found out what they had in common before they had their biggest moves and The ST50 list was born.
2) Save Research time – at any given year, there could be hundreds of stocks that break out to new 52-week highs or new all-time highs. There is no way, you could possible own them all. You have to find a way to filter through the noise and further decrease the universe of stocks to research. The ST50 list does that for you by adding relevant filters for earnings and sales growth, forward earnings growth, earnings surprises, market reaction to earnings surprises and setup scores. Those filters help to improve the odds of finding the next big market movers.
3) Market Timing – the market averages are lagging indicators that hide more than they reveal. The ST50 list consists of high-beta, growth stocks that typically lead the market on the way up and on the way down. In many occasions, future market leaders make new 52-week highs while the market averages are still struggling or making new 50-day lows. Paying attention to relative strength during market correction could make a huge difference in your returns. The ST50 list is designed to do exactly that for you.
Fast forward 3 years to October 2013, the ST50 list has more than 150 weekly editions. It has managed to discover and ride almost every major market winner and it has been an indispensable idea generation tool in our own approach to the market. We believe, it could be extremely useful to you too.
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