NAN Why I Should Buy Now, page-23

A mid cap growth fund manager understands the fundamentals and growth potential of companies. It would be interesting to find out what fund managers are invested in NAN. Just as important, determining what other growth stocks are in their portfolio. I would then look for how many of the stocks in their portfolio are trending up.

I don't understand business, demographic, and technological factors that contribute to a company's profit growth.. Hence I am limited to price and its trend over various time-frames. A chart is a useful compromise for determining the financial health of a business. When a stock is trading at a new 10-year high, this strongly indicates that the business is benefiting from increasing profit growth. I continue to hold such stocks for as long as possible before the trend changes.

The sector as a whole can also be sufficiently strong that it is out-performing other sectors. When scanning for 10-year new highs over the past 40 trading days, the following stocks from within the Health Care & Equipment Services Industry ASX sector appear:

FPH, NAN, EMV, HMD, CLV, PME.

These 6 stocks form the basis for further fundamental and/or technical analysis. Two stocks from this group (EMV and HMD) have insufficient price history, so are filtered out. Low volume stocks are also filtered out.

When scanning for 1-year new high over the past 40 trading days, the following stocks from within the Health Care & Equipment Services Industry ASX sector appear:

FPH, NAN, CLV, PME.

When scanning using the Mark Minervini trend template ASX 500 scan, the following stocks from within the Health Care & Equipment Services Industry ASX sector appear:

FPH, NAN, CLV, PME.

Note the high positive correlation using different scan algorithms. Strong stocks are easy to see by looking at new 52-week high lists in newspapers, Internet sites, and stock scans. They can't hide themselves.

Broker reports, financial media, and stock forum opinions are unreliable. My generated stock scan results are much more reliable because they are objective evidence that the stock is strong, hence we infer that the company is generating increasing profits. Sometimes the company may not be generating high profits, but the market is looking ahead in time to assume higher potential growth.