Zacks.com Featured Expert Kevin Matras Highlights the Following Stocks: Biosite, Inc. NDS Group and PetroKazakhstan, Inc

Business Wire, Nov 10, 2004

CHICAGO -- Zacks.com releases it's exclusive Screen of the Week report that highlights another successful stock picking strategy developed with their Research Wizard software. Kevin Matras looks at trading the Zacks Rank for a winning stock picking strategy. Some stocks in this week's screen are: Biosite, Inc. (NASDAQ:BSTE) NDS Group (NASDAQ:NNDS) and PetroKazakhstan, Inc. (NYSE:PKZ). Find out how it did over 126% last year and how it's beating the market again this year. Click here for the full story exclusively on Zacks.com: http://at.zacks.com/?id=109

Screen of the Week written by Kevin Matras of Zacks Investment Research:

"Upgrades and Revisions -- A Winning Strategy for Beating the Market"

This week, Kevin is going to highlight a screening strategy that primarily focuses on stocks with Increasing Earnings Estimates and Rating Upgrades.

Studies have shown that "earnings estimate revisions are the most powerful force driving stock prices." And stocks receiving upward EPS revisions will generally see the brokers that cover them upgrade their ratings too. This screen generates on average only 8-10 stocks per month, has an excellent win ratio and has shown consistently impressive returns, year after year after year.

The Parameters to this Strategy are:

Zacks Rank equal to 1

% Change Q1 Estimates over the last 4 weeks greater than or equal to 0

% Rating Change over 4 weeks greater than or equal to

P/E using 12 mo. Forward EPS Estimates less than or equal to 65

% Change Actual EPS Q0/Q-1 greater than or equal to 0 (positive EPS
growth this quarter over last) and % Change Actual EPS Q-1/Q-2 greater
than or equal to 0

% Change Actual EPS F0/F-1 greater than or equal to 0

5 Year Historical EPS Growth greater than or equal to 17

Last EPS Surprise greater than or equal to 0

Price/Sales ratio less than or equal to 4

And finally, the stocks all had to be trading at a minimum of $3 or higher.

The Results:

Kevin ran a series of tests over the last 4 year time span (2001 thru 10/22/2004), as well as a series of tests for each of the last 4 yrs. individually. Kevin rebalanced the portfolio every four weeks and started each run on different start dates so each test would be rebalanced over a different set of four-week periods. (This exercise was done to eliminate coincidence and verify robustness.) Over the last 4 years, this strategy has shown an average annualized gross return of 61.7% a year, with an average win ratio (winning periods divided by the total number of periods) of 72%. And again, it produces on average of 8-10 stocks for your portfolio each month. To break it down further; in 2001, the average annualized gross returns were 55.8% with an average win ratio of 71%. In 2002, the average annualized gross returns were 35.8% with an average win ratio of 64%. In 2003, the average annualized gross returns came in at a whopping 126.4%. (In fact, even the smallest run produced a gross return of 108.3%.) The average win ratio came in at 85%!

And so far, 2004's YTD (thru 10/22/2004) average annualized gross returns are up 28.3% (vs. the S&P 500's 1.7%).

Here's 3 stocks from this week's list (11/8/04) that look ready to breakout.

BSTE   Biosite, Inc.
NNDS   NDS Group
PKZ    PetroKazakhstan, Inc.

Get the rest of the stocks on this list and start using this winning strategy in your own portfolio. You can do it. Sign up now for your free trial to the Research Wizard and start making better decisions today. http://at.zacks.com/?id=111

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here http://at.zacks.com/?id=112

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