The Fab 5 update

The Fab 5 was on hiatus this week. I did enter a position in $MDVN earlier in the week, from the candidate list, but this was done as a normal Swing trade. On the subject of my candidate list, I thought this may be a good time to give a little detail on how I screen, select, and ultimately choose candidates.

Here is a current screen result using Finviz:

Ok. So I start with a rather short list most of the time. This is primarily due to the constraints put on Price and Average Volume. In the selection process, I keep an extensive spreadsheet on numerous metrics for the company. Some of the filtering process is easy, for example:

  • $PM has a $154 Billion market cap here near $90. It will take a LOT to move to $100, a $16 Billion market cap boost.
  • $ALXN & $ATHN have really high P/E ratios so have to be careful with these (just how far can the market look forward?). $ALXN had an outstanding week – was the top performer in the candidate list.
  • $WFM is now past a recent earnings event so that catalyst is past

Of course each candidate receives a good chart review, a look at how the sector/industry is doing and any seasonality that could come in to play. Once I feel that I have completed that filter process, the next step is crucial: For the Option Chains of each candidate, are there any with poor volume/strike availability? This is key for me because I utilize Option Collars to protect the whipsaw that has been occurring with more frequency. A key filter component in my process.

Some performance metrics since inception:

  • Complete Status: 17
  • Average Gain: $13.41
  • Largest Gain: $EL at $23.85
  • Smallest Gain: $DLTR at $2.85
  • Not-complete Status: 22
  • Average Gain: $2.33

 

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