Zacks.com featured expert Kevin Matras highlights: Braskem, Hanwha Q CELLS and Luxfer Holdings

For Immediate Release

Chicago, IL – June 15, 2016 - Stocks in this week’s article include: Braskem (BAK), Hanwha Q CELLS (HQCL) and Luxfer Holdings ( LXFR). Kevin Matras screens for companies showing their 'first' profit, and explains why they are ones to watch.

Screen of the Week written by Kevin Matras of Zacks Investment Research:

Increase Your Returns with the ROE 2 Screen

This screen uses the 'Return on Equity' (ROE) measure as one of the main components in this strategy.

ROE is one of the quickest ways to gauge whether a company is creating assets or gobbling up investors' cash.

ROE = income / common equity

For instance; if the ROE is 10%, then ten cents of assets are created for each $1 of shareholder equity in a given year.

Knowing the company is generating assets on invested capital rather than burning thru it is a great starting point.

Parameters

• ROE greater than or equal to 10
The median ROE value for all of the stocks in the Zacks Universe is under 10. So any company with shareholder equity less than this benchmark is disqualified.

• Zacks Rank equal to 1
The Zacks Rank (which is considered by many to be the best rating system out there), looks at upward earnings estimates revisions (amongst other things), and will get us into companies whose forecasted earnings are getting stronger.

• % (Broker) Rating Strong Buy equal to 100(%)
Since broker ratings are typically skewed wildly to 'buy' and 'strong buy', I decided to cancel out any company where the brokers aren't fully on board.

• Price/Sales Ratio less than or equal to 1
A low price to sales ratio (1 and below for example), is usually thought to be of better value, since the investor is paying less for each unit of sales.

• Price greater than or equal to 5
And for good measure, all of the stocks have to be trading at a minimum of $5 or higher. Most money managers won't touch anything under $5.

Results

Over the last 16 years, the ROE 2 strategy, using a one-week holding period, showed an average annual return of 38.6%.

And it's already up 19.2% this year vs. the S&P's 3.6%.

Return on Equity is a great item to use regardless of what kind of investor you are.

I particularly like to look for increasing ROE. That provides another clue that management is doing something right and that they have costs under control.

If their ROE is falling, that can alert you to potential problems.

Trading the Strategy

All stocks are purchased with an equal dollar amount. At the end of the holding/rebalancing period (1 week), the screen is run again, keeping the stocks that remain qualified, selling the stocks that no longer qualify, and buying the new stocks that newly qualify.

This strategy comes loaded with the Research Wizard and is called bt_sow_roe2. It can be found in the SoW (Screen of the Week) folder.

Here are three of the five stocks that qualified for the ROE 2 strategy:

(BAK) Braskem
(HQCL) Hanwha Q CELLS
(LXFR) Luxfer Holdings

Get the rest of the stocks on this list and start trading the ROE 2 (or any of our other strategies) in your own account. Remember, the key to successful screening is in discovering those screens that have produced profitable results in the past. That's exactly what you get with the Research Wizard stock picking and backtesting program.

Click here for your 2 week free trial to the Research Wizard >>

Sign up now for your free trial today and start picking better stocks immediately. And with the backtesting feature, you can test your ideas to see how you can improve your trading in both up markets and down markets. Don’t wait for the market to get better before you decide to do better. Start learning how to be a better trader today: https://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.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use. Each week, Zacks Profit from the Pros free email newsletter shares a new screening strategy. Learn more about it here https://at.zacks.com/?id=112

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.

Follow us on Twitter: https://twitter.com/zacksresearch

Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com

Visit: www.Zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer .

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BRASKEM SA (BAK): Free Stock Analysis Report
 
HANWHA Q CELLS (HQCL): Free Stock Analysis Report
 
LUXFER HOLDINGS (LXFR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.