Zacks.com Featured Expert Kevin Matras Highlights: A.S.V., Inc., Micros System, Inc. and World Air Holdings, Inc

Business Wire, June 14, 2005

CHICAGO -- Kevin Matras shows how you can beat the market with his 'Upgrades and Revisions' strategy. Stocks in this week's article are: A.S.V., Inc. (NASDAQ:ASVI), Micros System, Inc. (NASDAQ:MCRS) and World Air Holdings, Inc. (NASDAQ:WLDA). 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:

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 (The Zacks Rank is probably one of the best, if not the best rating system out there.)

% Change Q1 Estimates over the last 4 weeks greater than or equal to 0 (earnings with fresh upward revisions)

% Rating Change over 4 weeks greater than or equal to 0 (since analysts have such a huge upside bias, Kevin is excluding anything that's been even slightly downgraded)

P/E using 12 mo. Forward EPS Estimates less than or equal to 65 (that's right, 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 (positive EPS growth last quarter over the one before that) (In other words, two quarters of positive EPS growth.)

% Change Actual EPS F0/F-1 greater than or equal to 0 (positive EPS growth this year over last)

5 Year Historical EPS Growth greater than or equal to 17 (yes, 17)

Last EPS Surprise greater than or equal to 0 (no negative surprises allowed)

Price/Sales ratio less than or equal to 4 (actually, Kevin had great success with the Price/Sales ratio being between 2, 3 and 4, but he went with 4 because it didn't narrow down the stock selection so much, ... but if you want to narrow it down, tighten the ratio up a bit)

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 (thru 2004), as well as a series of tests for each of the last 4 yrs. individually. He 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 63.7% a year, with an average win ratio (winning periods divided by the total number of periods) of 73%. 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 42.1% with an average win ratio of 68%. In 2003, the average annualized gross returns came in at a whopping 125.8%. (In fact, even the smallest run produced a gross return of over 100%.) The average win ratio came in at 87%! And in 2004, the average annualized gross returns were up 41.8% with an average win ratio of 68%.

This strategy comes loaded with the Research Wizard program and is called; Upgrades and Revisions2.

Here's 3 stocks from this week's list (6/13/05).

ASVI  A.S.V., Inc.
MCRS  Micros System, Inc.
WLDA  World Air Holdings, Inc.

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

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

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