“Bullseye Stocks” – How to Find Shares That Can Beat the Dow by 6x

By TradeSmith Research Team

I spent four of my years with Cantor Fitzgerald working out of the investment bank’s London office, where I ran the company’s Dutch equity derivatives trading desk.

Like most Americans who live and work in another country, I quickly picked out the elements of British life that I liked and wanted to take advantage of.

Like pubs.

Pubs (short for “public house”) occupy an intriguing spot in England – and are much more than a “local bar.” They first appeared after the invading Romans constructed a road network that revved up travel – creating a need for taverns to feed and board those wanderers.

Through the centuries, taverns evolved into pubs – de facto community centers in towns and villages where residents go to eat, drink, and socialize. Most offices have favorite gathering spots, too, and even an unspoken routine – specific evenings of the week where folks meet after work for that “quick pint” before riding home.

Ale and such treats as “shepherd’s pie” are the normal fare. And games are also a big draw – including such tests of skill as snooker (which is similar to pool) and darts.

I wasn’t much of a dart player myself. But it’s part of my “trader’s DNA” to analyze everything I see – so I watched more dart matches than I can count. The best players consistently hit the highest-value spots on the board, which are the bullseye and the double- and triple-points rings.

Those spots bring you the biggest points for a reason – they’re the toughest to hit.

Casual players get lucky once in a while – and celebrate like crazy when they do (especially after a few pints). But skilled players consistently ignore 99% of the board – the low- and mediocre-point values – and focus on the crucial 1% where they get the most bang for the buck (or pound, I should say).

I hadn’t yet developed my Quantum Edge stock-picking system. But maybe those dart matches – and that hard “thwack” sound that accompanied a bullseye strike – served as a kind of inspiration.

With my system, that “thwack” of a bull’s-eye was replaced by the “click” of a mouse. That click eliminates 99% of stocks – and we aim for the remaining 1% (less actually) that are likely to deliver the biggest gains.

Let’s call them “Bullseye Stocks.”

And the more often you hit that bullseye, the more wins you can stack, and the faster those wins will turn into wealth.

Let’s talk today about how to aim for those rare Bullseye Stocks. Then you can celebrate your wins however you’d like.

So Many Choices

There are more than 10,000 stocks trading on U.S. exchanges at any given time – and a lot more than that around the world.

So out of that mess, what defines an elite stock with the highest value for investors?

The simplest answer: I’m looking for shares of well-run companies – those defined by superior fundamentals. And I’m looking for those shares to also have great technical metrics.

And then, I want those fundamentally and technically strong stocks to also be ones that the smartest investors want to own. In other words, I want “Big Money” chasing them.

These are the stocks that offer the greatest probability of large gains time and time again.

Believe it or not, you’re talking about only 50 or stocks that really fit this description on any given day.

And getting from 10,000 down to 50 turns into an almost impossible exercise. You have to know what to look for, and you need the resources to do it.

In truth, it is impossible for any one person – and probably an entire team. That’s why I developed a system that relies on massive computing power to collect and analyze data.

Zooming In on the Best

A bunch of those 10,000 publicly traded companies are either penny stocks or are too thinly traded (illiquid) to be viable investments. They’re just too risky for your hard-earned money. Eliminating those immediately brings us down to about 6,000 stocks.

That’s still a numbing challenge – like finding a needle in… a jungle. My system layers on fundamental “screens” (filters) to find companies that are trouncing analyst forecasts and delivering blowout sales and earnings. I developed algorithms to look for companies with double-digit sales-and-earnings growth, hefty profit margins and low levels of debt. And to find companies that are reasonably valued or selling at a discount.

From there, we add more screens, this time based on a whole other discipline of stock analytics – the technicals. I’m not talking about technical analysis here, which is based heavily on chart patterns. I’m talking about the mechanics of how a stock is trading, or what’s really going on under the hood.

Think back to your high school or college physics class and you may remember Sir Isaac Newton and his First Law of Motion – “an object in motion tends to stay in motion.”

My system relies on the most important technical metrics that indicate strong price action – stocks in motion that are likely to stay in motion. They have strong momentum as both growing businesses and rising share prices.

We’re almost there. We need a couple of more steps to sharpen our focus all the way.

Now It’s Time to Score

Through data analysis, I can track the financial footprints of Big Money investors – right down to the specific stocks they’re buying.

My career as a trader gave me a front-row seat to how the big institutions accumulate stocks – while trying to cover their tracks as they did so. They used to pay me to do that, so I can tell you firsthand that they take great pains to keep stocks they’re targeting from shooting up too dramatically – a mistake that could trigger a buying stampede.

But because I spent years matching up these buyers and sellers, I know how to assemble the puzzle pieces to give me a clear picture of Big Money flowing into – and out of – individual stocks.

I turn my Quantum Edge system loose to identify these hidden signals of institutional buying. I can’t give it all away here – institutions and hedge funds now pay me big money for my research – but I look for such signs as stocks “gapping” higher, higher-than-average volume, increasing volatility, price breakouts, and more.

When a big player buys a stock, it creates more demand than there is supply. That means there is only one way for a stock to go – up.

And when all is said and done – when we’ve eliminated the too-small and too-risky stocks, when we’ve run our fundamental and technical screens, and when we’ve identified which of the remaining stocks have Big Money flowing into them – we’ve found the highest-value targets.

To make sure we get all the way to the best of the best, I then turn to my Quantum Score. My system assigns this score early in the process to the 6,000 stocks that are liquid enough and trade for more than $1. We then circle back to the score for the final ranking to find the cream of the crop.

These are the absolute best stocks to invest in, with the highest probability of making you money. I count on seven out of 10 stocks being profitable investments. And you can build real wealth repeating the process over and over again, stacking profits on top of profits.

I have spent years – decades, to be honest – and millions of dollars developing and testing my Quantum Edge system, and the results really do speak for themselves. It’s a technology-based method for rating stocks that beats the broad market by 600% by finding the best stocks at the best time to buy for the best returns. 

And that’s what I want to help you learn more about here in Power Trends, so you can do the same.

Talk soon (and “thwack”),

Editor, Jason Bodner’s Power Trends