3 Power Factors to Find the Best Stocks in This Strengthening Market I know there are a lot of happy and unhappy people out there after the election. I know there are things America still can’t agree on. But as investors, I’m confident in saying that every one of us wants to make money. On that there is 100% agreement. And the way things have fallen into place the last few weeks, now is the time to do it. Now is the time to position your investments for maximum benefit regardless of your feelings on the winner. The election is resolved. Interest rates are falling. Inflation is under control. Tons of cash is still on the sidelines. Add it all up and I think we are in for a multiyear run in stocks. If you’re not already, I encourage you to start looking for stocks to invest in so you can leverage this opportunity. It’s not too late. There are a lot of profits still to be had. Today, I want to talk about the proven Power Factors to help you identify the best stocks for building your wealth. These are the highest quality stocks seeing unusually large money inflows. And guess what? That pool of stocks just increased. We suddenly have a lot more stocks rising as money pours in. And strength tends to beget more strength. If you’re in the right stocks, that is. Be careful, because not all have stocks have the necessary Power Factors to be the high-probability moneymakers we all want. Let’s review the three primary Power Factors. 1. Superior Fundamentals Analyzing a company’s fundamentals to make smart investing decisions is not a new concept. That’s because it’s super important. Who wants to invest their hard-earned money in bad businesses? Still, you want to own not just good businesses but great businesses. Businesses that are growing rapidly, making money, and ramping up heading to the future. When developing my Quantum Edge system, I incorporated certain fundamental Power Factors that in combination tended to best forecast future price movement. I can’t give it all away, but I can share some of the fundamental factors that get you going in the right direction. Some of the things I look for are: - Double-digit percent sales growth the last one and three years
- Double-digit percent earnings growth the last one and three years
- Strong forecasted sales and earnings growth
- Double digit percent profit margin
- Expanding profit margins
- Low debt-to-equity ratio (25% or less is ideal)
2. Strong Technicals Let me be clear right up front that when I say “technicals” I’m not referring to technical analysis. The technicals are more the mechanics of how a stock trades, and they can tell us a lot about where share prices are headed. Believe it or not, the technicals count for a larger portion of the overall Quantum Score my system assigns to stocks than the fundamentals. It’s not much more, but it’s more. My data clearly shows that stocks usually keep rising a lot longer than investors think they can. Generally speaking, you shouldn’t be afraid to buy into strength. Here are some of the technical Power Factors I like to see: - Stocks breaking to new 11-week highs
- Stocks at 52-week highs
- Stocks at all-time highs
- Volume rising with price
When stocks have the right technicals, it usually means that… 3. Big Money Is Pouring In The magical trifecta comes when we get what I call Big Money buy signals on one of these superior stocks. That indicates the power players are loading up on the stock. I would argue this is the most important Power Factor. Mr. and Mrs. Mainstreet’s investments aren’t going to move stocks like the biggest investors on the planet. To give you some context, investment institutions account for between 70& and 90% of all daily trading volume, according to J.P Morgan and Morgan Stanley. Your odds of success increase dramatically when you pay attention to this. We want to slide in when the big boys are competing to buy the best stocks because they are boost our wealth with theirs. Identifying money flows is also the hardest thing for most investors to do on their own. I was fortunate enough to be the middleman on these Big Money trades, so I learned all the tricks firsthand and wrote algorithms in my system to flash a “green light” when the data indicates unusually large buying. Here’s what it looks like in one of our Quantum Edge Pro stocks that soared 37.5% just last week. There’s a lot of analysis that goes into these three Power Factors, but the idea is pretty straightforward. It has allowed me to amass a phenomenal win rate of about 70% with my selections over time. With not just more winners than loser but bigger winners than the losers, the aggregate outperforms the S&P 500 by 7-to-1 in one model portfolio strategy going back to 1990. We really have a unique and incredible opportunity ahead of us, so I really hope you’ll take advantage. Stick with these Power Factors, and you should end up in the best-of-the-best stocks likely to lead the way. And if you’d like my help picking stocks or complete access to the Quantum Score for every stock my system analyzes, click here to learn how to join Quantum Edge Pro. Talk soon, Jason Bodner Editor, Jason Bodner's Power Trends |
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