PDF Stock Guide Winter 2016 - MarketSmith

Quarterly Stock Guide

Winter 2016

TIPS AND SCREENS

TO KEEP YOUR PROFITS COZY THIS WINTER

Looking for the Best Stocks in 2016?

Gain insight from the

best moves in 2015

TOP STOCKS 2015

TOP STOCKS 2015

Analyzing Breakouts and Breakdowns

Smith, Incorporated Angeles, CA 90066 s@

1/7/2016 1:58:22 PM

Successful investors know that timing trades accurately starts by studying leaders of the past to identify common characteristics that preceded their big moves--and their breakdowns. Top Stocks 2015: Analyzing Breakouts and Breakdowns focuses on 2015's big movers to help you spot future winners early-on and avoid underperforming Stocks 2015 includes:

? Stock graphs with price/volume activity and fundamental data as of 12/31/15

? Chart mark-ups representing the O'Neil Methodology

? Company stories that add context to the year's breakouts

Order your copy of Top Stocks 2015 today.

Go to print or call us at (800) 452-4422.

Stock Guide

Winter 2016

Going into the end of the year, index returns have been mixed. Even though the Nasdaq reached a new all-time high this year, it only closed up 5%, while the S&P 500 has underperformed and is down almost 2% year-to-date. At its high, the Nasdaq was up over 10% on the year, while it was down 9% at its lows during the August Flash Crash. Clearly, the market has been volatile despite the early optimism in Q1 due to global monetary easing and near-zero interest rates.

Since then, global events have driven markets in extreme directions. After rising more than 150% in just over a year, China's Shanghai Composite proceeded to fall 45% in less than three months as economic concerns increased. Other global economic concerns, like the Greek debt crisis, and Fed interest rate uncertainty culminated in the Flash Crash on August 24, 2015 when the Nasdaq fell almost 9% at the market open.

Many of the best performing stocks in 2015 had tremendous moves before falling significantly during the August correction, which is why, in this stock guide, we'll be reviewing former leading stocks for sell signals that occurred around the top. Learning to identify these sell signals early-on could help lock-in gains before the next major drawdown occurs.

Our Winter 2015 Stock Guide covered how to conduct a post-analysis of your investments, which is a process we recommend revisiting after the close of each year. Studying choppy and difficult markets, and trades made during those times, are particularly telling of market behavior and can clue you in on ways to maintain gains and preserve capital. In addition to conducting a post-analysis of your buys and sells, we've also provided three screens to identify 2015's best performing stocks and industry groups, which should train you to recognize future leading stocks before they make big moves.

Best returns,

Your MarketSmith Team

Don't miss our webinar series Stay in Step With the Market for insight into current market activity at webinar

Stock Guide Chart Legend

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

50 49

*XYZ CORP (XYZ)

NASDAQ

BLDG-A/C & HEATING PRDS

17.1 SHRS / 12.2 FLT / AVG VOL 85,500



$24.13 (OH -4%)

MANUFACTURES HEATING, VENTILATION AND AIR CONDITION EQUIPMENT FOR THE INDUSTRIAL/CONSTRUCTION/COMMERCIAL MARKETS.

5/10 TO REPURCHASE 5% OF COMMON STOCK OUTSTANDING.

SHORT INT 24.3 DAYS -3%

OPTIONS ON

CBOE

UP/DOWN

1.0

EX-DIV

6/ 8

YIELD

1.5%

GROWTH RATE

EARNINGS STAB

EPS RANK

PE 16

(

5 YR PE

+31% 13 63

1.0XS&P) 9- 31

DEBT

0% 3.50 X BK VALUE FUNDS

NEW CEO 7/10 INVENTORY TO. 7.5X BANKS

TIMELINESS

B R&D

13.6% MGMT

ACC/DIST

D RET ON EQUITY 26% ALPHA

SMR RATING

B CASH FLOW

$2 BETA

40% 8%

29% 0.03 0.98

EARNINGS(DEC) HI LO GROUP REL STR 82 RS EPS IPO 7/7/07

$ 5.00

(C) (W)

COMPOSITE RATING 82

04 $ 05 06 07 08 09 10 11

0.39 $ 0.60 0.90 1.22 1.60 1.62 1.38 EST 1.62 EST

14

9 SmithAO

AOS

13

9 Watsco

WSO

19 11 Lennox

LII

23 16

23 12

22 14 -15%

CANADIAN QTR 4

+17%

81 76 75

95 82 85

QTR ACTIVE

1

QTR 2 25.11

QTR 3

PRICE SCALE

24

48 47

46

45

44 43 42

22.32

20.63

22.00 20.72

22.41

22

21.50

20

R S LINE VS SP500

2/1

17704

5376

18.00

18.49 18.64

PSO

DIV INC

84 18

FORBES

? 06/04/10

16

VOLUME

*

* (00) 1000

600 400

17 31 14 28 11 25 9 23 6 20 4 18 1 15 29 12 26 12 26 9 23 7 21 4 18 2

AUG

SEP

OCT

NOV

DEC

JAN 10 FEB

MAR

APR

MAY

JUN

JUL

* * EPS DUE 8/10 QUARTER ENDED JUN 30, 09 QUARTER ENDED SEP 30, 09 QUARTER ENDED DEC 31, 09 QUARTER ENDED MAR 31, 10

EARNINGS $

0.43 VS 0.43

0% 0.45 VS 0.47

-4% 0.36 VS 0.35

+3% 0.30 VS 0.39 -23%

SALES MIL. $ 68.6 VS 74.8

-8% 58.5 VS 79.3 -26% 54.2 VS 60.2 -10% 49.3 VS 64.0 -23%

DIVIDEND-PE $ 0.18

13X -- 9X N/A

13X -- 11X $ 0.18

12X -- 11X N/A

14X -- 12X

41

40

39 38 37 36

35 34

21

22 23

24 25

26 27 28 29 30 31

32

33

1. 5-Year Earnings Growth Rate Over 20% 15. Average Daily Volume Over Last 50

Per Year

Trading Days

2. Company Name

3. Industry Group Classification

4. Datablock Containing the Following Information: a. Short Interest Value and Percent Change b. Options Availability and Exchange c. 50-Day Ratio of Daily Up Volume to Daily Down Volume d. Ex-Dividend Date e. Current Yield

5. Ticker or Trading Symbol

6. Top 5 Stocks in Group

7. Primary Exchange

16. Datablock Containing the Following Information: a. Stock Price Relative to Book Value b. Inventory Turnover c. Research and Development % of Total Sales d. Return on Equity Percentage e. Cash Flow Per Share From Operations

17. Convertible Issues

18. Warrants Outstanding

19. Closing Price

20. % Off High

21. Datablock Containing the Following Information

8. Industry Group Relative Strength Rating

a. Mutual Fund Sponsorship

9. Common Shares Outstanding (in Millions)

b. Bank Sponsorship

10. Web Address 11. Active stock (NASDAQ only) 12. Floating Supply (in Millions) 13. Datablock Containing the Following

Information: a. 5-Year Earnings Growth Rate

c. Management Ownership d. Alpha e. Beta 22. Composite Rating 23. Arithmetic Price Scale 24. Key High and Low Price Points

b. Best RS Line & Rating Factor

25. 50-Day Moving Average Price Line

c. Earnings Per Share Rank (EPS Rank) 26. 200-Day Moving Average Price Line

d. Current Price/Earnings (P/E) Ratio

27. Relative Strength Rating

e. High and Low Price/Earnings (P/E) Ratios

14. Datablock Containing the Following Information:

a. Debt Percentage b. New CEO in Last 2 Years c. Timeliness Rating d. Accumulation/Distribution Rating e. SMR Rating

28. Relative Strength Compared to S&P 500

29. Article in Major Publication

30. *Indicates 2nd Highest Weekly Volume in Last 12 Months

31. *Indicates Highest Weekly Volume in Last Year or Volume 100% or More Above ADV

32. Volume Scale

33. Earnings % Change

34. Qtrly EPS Compared to EPS Same Qtr Last Year ( denotes pretax, nonrecurring items included)

35. Insider Buying/Selling

36. Qtrly Sales Compared to Sales Same Qtr Last Year

37. 50-Day Average Daily Volume

38. High and Low P/E Ratio for the Quarter

39. Dividend Change

40. Security Announcement

41. Cash Dividend for the Quarter

42. *Indicates Earnings Expected to Report Within 4 Weeks

43. *Indicates Earnings Were Reported in Last 2 Weeks

44. Volume Peaks (in Hundreds)

45. Stock Dividend or Split

46. Daily High, Low, and Closing Prices

47. Line Indicates Beginning of Calendar Quarter

48. Indicator for Canadian Dollars

49. Datablock Containing the Following Information: a. Fiscal Year End b. Annual Operating Earnings ( denotes pretax, non-recurring items included) c. Calendar Year High/Low Prices d. Earnings Per Share Estimates e. EPS Estimates % Change f. Estimate Revision

50. Business Summary

Table of Contents

Stock Guide Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Market Charts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

How to Identify Signs of Topping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Winter 2016 Screens*

2015's Top Large Caps

11

Netflix Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NFLX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AMZN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Intl Ltd Adr.. . . . . . . . . . . . . . . . . . . . . . . . . CTRP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Activision Blizzard Inc. . . . . . . . . . . . . . . . . . . . . . . . . . ATVI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Netease Inc Adr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NTES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Acuity Brands Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AYI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

2015's Top Mid Caps

15

Abiomed Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ABMD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . STMP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Smith & Wesson Hldg Corp . . . . . . . . . . . . . . . . . . . . . SWHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Cambrex Corp. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CBM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Ligand Pharmaceuticals. . . . . . . . . . . . . . . . . . . . . . . . . LGND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Universal Display Corp. . . . . . . . . . . . . . . . . . . . . . . . . OLED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

2015's Top Industries

19

Youku Tudou Cl A Ads. . . . . . . . . . . . . . . . . . . . . . . . . YOKU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Wayfair Inc Cl A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . W. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Monster Beverage Corp. . . . . . . . . . . . . . . . . . . . . . . . . MNST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

L G I Homes Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LGIH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Activision Blizzard Inc. . . . . . . . . . . . . . . . . . . . . . . . . . ATVI. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Owens Corning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

*All screen results are computer-generated and were run on December 31, 2015.

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