Stock Picks and Industry Ranking

James Andrews

June 19, 2007

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Top down stock picking based on the leading stocks in leading industries should be supplemented with additional fundamental and chart analysis.

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1.0 Leading Industries

About 90% of an industry’s rank is weighted by the percent increase in its index price over the previous 4 weeks and 10% is weighted by how much the index is oversold based on its 10-period Williams-%R. Industry rank ranges from a high of 1 to a low of 215 based on a list of 215 industries in the Yahoo Finance industry classification system.

The main reason for using this classification system is the ready availability of industry performance. Each industry’s performance is accessible through online data retrieval software that imports the numbers directly from Yahoo Finance and sorts them in a spreadsheet. These tools are available on the website.

The leading industries for the past month are ranked in Table 1A. The leftmost column is the rank. The second column from the left is the number of positions an industry is above or below its 4-week average rank.. The third column from the left is the relative rank of the industry based its movement above its average rank. Clicking on the industry name takes you to an industry summary page. The “C’s” will display the companies in the industry. The last three columns on the right are the percentage gains for the previous trading day, the previous week and the previous four weeks.

Table 1A

Leading Industries

June 18, 2007

Rank	Relative To Avg. Position	Rank of Position Change	Leading Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
1	56	36	Synthetics	C's	1.2%	43.4%	41.4%
2	129	5	Home Furnishing Stores	C's	-0.5%	39.7%	31.2%
3	63	31	Home Health Care	C's	0.2%	15.4%	17.7%
4	81	16	Sporting Goods	C's	-0.3%	15.0%	18.9%
5	76	19	Medical Laboratories & Research	C's	0.0%	7.7%	10.4%
6	52	38	Agricultural Chemicals	C's	1.2%	6.4%	6.2%
7	23	68	Copper	C's	-0.2%	5.7%	13.8%
8	-1	99	Personal Computers	C's	2.4%	4.8%	13.0%
9	22	69	Processing Systems & Products	C's	-0.4%	2.1%	10.4%
10	119	7	Diagnostic Substances	C's	-0.1%	3.4%	3.6%
11	51	40	REIT - Residential	C's	-1.2%	-0.6%	4.3%
12	64	29	Semiconductor - Broad Line	C's	0.3%	4.9%	2.3%
13	96	13	Hospitals	C's	-0.3%	4.6%	7.0%
14	77	18	Discount, Variety Stores	C's	-0.3%	-0.6%	4.3%
15	48	45	Electronic Equipment	C's	-0.5%	4.7%	4.1%
16	70	22	Industrial Metals & Minerals	C's	0.2%	4.0%	10.8%
17	110	10	Semiconductor - Specialized	C's	-0.2%	10.9%	10.7%
18	88	15	Regional - Pacific Banks	C's	0.1%	6.4%	6.8%
19	68	25	Resorts & Casinos	C's	0.0%	0.9%	8.5%
20	-9	108	Heavy Construction	C's	0.5%	5.9%	11.1%
21	131	3	REIT - Hotel/Motel	C's	-1.2%	-1.6%	0.2%
22	21	72	Building Materials Wholesale	C's	-0.1%	2.7%	8.5%
23	118	8	Drug Manufacturers - Other	C's	-0.5%	7.3%	6.7%
24	21	73	Textile Industrial	C's	0.7%	-4.4%	-0.1%
25	56	35	Long-Term Care Facilities	C's	-0.9%	0.5%	1.5%
26	136	2	REIT - Diversified	C's	-1.7%	-1.0%	0.3%
27	31	64	Gaming Activities	C's	-0.3%	3.2%	7.7%
28	49	43	General Entertainment	C's	-0.4%	0.2%	0.3%
29	112	9	Technical & System Software	C's	-0.6%	6.8%	7.1%
30	47	47	Farm & Construction Machinery	C's	0.2%	3.8%	8.1%
31	-11	113	Independent Oil & Gas	C's	0.5%	4.8%	8.1%
32	-20	128	Technical Services	C's	0.2%	3.1%	5.3%
33	142	1	REIT - Office	C's	-1.2%	-0.7%	-0.7%
34	48	44	Publishing - Newspapers	C's	-0.7%	-1.2%	-1.6%
35	41	50	Information & Delivery Services	C's	-0.3%	-2.3%	-0.9%
36	93	14	Medical Equipment Wholesale	C's	-0.2%	0.7%	2.5%
37	13	84	Oil & Gas Drilling & Exploration	C's	0.5%	5.8%	7.9%
38	41	51	Lodging	C's	-1.0%	1.0%	1.6%
39	-20	132	Drug Delivery	C's	0.1%	1.5%	6.0%
40	54	37	Credit Services	C's	-0.6%	-0.2%	0.3%

The top 20 leading industries are plotted in Figure 1. It appears that synthetics and home furnishing stores had a sudden rise that needs investigating.

FIGURE 1

1.1 Stocks in Leading Industries

The synthetics companies that trade an average of at least 200,000 shares per day and not traded over the counter are listed in Table 1B. Similar stocks for the home furnishing industry are listed in Table 1C. Those for the home health care industry are listed in Table 1D. Leaders for the past week and month have the lowest numbered rankings.

Table 1B - Synthetics

Symbol	Exchange	Avg. Vol.	Volume	Price	Last % Chg	1wk %Chg	1mo %Chg	1 wk Rank	1 mo Rank
PX	NYSE	1,440,320	1,686,000	$72.25	0.40%	4.1%	4.8%	6	6
IFF	NYSE	494,368	413,800	$52.05	0.54%	2.7%	2.1%	9	9
RHA	NYSE	329,848	52,900	$48.20	0.42%	5.2%	1078.5%	3	1
ALB	NYSE	761,091	1,639,000	$38.58	-3.24%	-3.7%	-9.4%	16	16
CMP	NYSE	307,698	229,800	$35.12	1.97%	4.9%	0.1%	4	11
NCX	NYSE	634,455	1,127,300	$34.64	1.55%	0.1%	-3.8%	15	14
PONR	NGM	319,459	154,738	$34.40	0.17%	0.2%	17.1%	14	3
ROC	NYSE	248,117	238,200	$33.43	0.69%	0.8%	4.5%	13	7
NLC	NYSE	1,094,690	637,900	$27.20	0.29%	4.0%	7.5%	7	5
HUN	NYSE	780,959	832,500	$20.00	-0.20%	1.1%	0.3%	12	10
GGC	NYSE	1,239,680	850,200	$18.27	3.98%	9.4%	-3.8%	2	15
TRX	NYSE	253,616	78,100	$14.63	0.55%	3.5%	10.9%	8	4
LNDC	NasdaqNM	201,238	108,704	$13.32	-1.41%	4.3%	-3.0%	5	13
CCC	NYSE	680,238	936,800	$11.73	0.69%	12.2%	25.2%	1	2
POL	NYSE	651,708	238,600	$7.18	0.28%	2.0%	-1.4%	10	12
WLM	NYSE	310,103	137,700	$3.18	7.43%	1.6%	2.9%	11	8

Table 1C – Home Furnishing

Symbol	Exchange	Avg. Vol.	Volume	Price	Last % Chg	1wk %Chg	1mo %Chg	1 wk Rank	1 mo Rank
BBBY	NasdaqNM	2,784,210	2,497,702	$37.73	-0.61%	0.6%	-7.0%	10	11
WSM	NYSE	1,358,550	1,007,000	$33.66	-0.06%	3.1%	-1.8%	6	7
PIR	NYSE	1,339,900	799,846	$8.84	-1.01%	4.0%	19.1%	4	2
GGC	NYSE	1,239,680	850,200	$18.27	3.98%	9.4%	-3.8%	2	9
CCC	NYSE	680,238	936,800	$11.73	0.69%	12.2%	25.2%	1	1
POL	NYSE	651,708	238,600	$7.18	0.28%	2.0%	-1.4%	8	6
RSTO	NGM	360,141	170,109	$6.11	0.00%	2.5%	11.7%	7	3
BBA	NYSE	316,825	204,100	$0.60	-1.64%	-15.5%	-4.8%	11	10
WLM	NYSE	310,103	137,700	$3.18	7.43%	1.6%	2.9%	9	5
TRX	NYSE	253,616	78,100	$14.63	0.55%	3.5%	10.9%	5	4
LNDC	NasdaqNM	201,238	108,704	$13.32	-1.41%	4.3%	-3.0%	3	8

Table 1D – Home Health Care

Symbol	Exchange	Avg. Vol.	Volume	Price	Last % Chg	1wk %Chg	1mo %Chg	1 wk Rank	1 mo Rank
LNCR	NasdaqNM	723,103	816,841	$39.45	1.60%	0.4%	4.9%	4	2
AHG	NYSE	711,367	609,500	$28.96	-0.24%	1.6%	0.1%	2	5
FVE	AMEX	540,583	209,900	$8.15	-1.09%	-0.2%	4.4%	5	3
CHE	NYSE	447,734	514,200	$66.75	-1.04%	1.0%	0.3%	3	4
AMED	NasdaqNM	415,755	308,547	$35.71	-1.03%	-2.6%	-3.2%	7	8
LHCG	NasdaqNM	400,145	196,281	$27.07	0.97%	-3.6%	-3.3%	8	9
MATR	NasdaqNM	271,292	207,692	$30.11	0.37%	2.0%	-3.0%	1	7
OPTN	NasdaqNM	210,117	125,789	$15.67	0.90%	-1.1%	6.4%	6	1
KAD	AMEX	204,772	93,500	$1.27	1.60%	-4.5%	-2.3%	9	6

Symbols that are highlighted in blue are optionable. Normally, the Options Advisory limits itself to stocks priced above $30 because the higher a stock’s price, the smaller percentage change is needed to produce a desired change in the value of an options contract.

Before trading any of these stocks, some due diligence is needed to look at their charts and the fundamentals that you typically use. These tables were obtained with tools available on the website, as well. The tools can be used to produce similar tables for any or all of the leading industries above or the lagging industries in Table 2A and Figure 2 below.

2.0 Lagging Industries

Lagging industries for the past month are listed in Table 2A. A chart showing the rank performance of the 20 worst ranked is shown in Figure 2.

Table 2A

Lagging Industries

May 18, 2007

Rank	Relative To Avg. Position	Rank of Position Change	Lagging Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
176	-17	123	Tobacco Products, Other	C's	-0.6%	0.8%	-1.3%
177	-113	213	Foreign Regional Banks	C's	-0.1%	2.6%	-0.5%
178	-90	208	Diversified Computer Systems	C's	0.3%	1.5%	-0.2%
179	-35	155	Cleaning Products	C's	0.0%	1.2%	-1.8%
180	-58	189	Jewelry Stores	C's	-1.2%	-1.9%	-6.8%
181	-13	119	Food Wholesale	C's	1.5%	3.7%	1.4%
182	-63	194	Security & Protection Services	C's	-0.5%	-0.2%	-1.3%
183	-73	202	Waste Management	C's	0.5%	2.0%	-0.7%
184	-56	184	Surety & Title Insurance	C's	0.0%	-0.5%	-3.2%
185	-32	148	Regional Airlines	C's	0.3%	1.1%	-0.3%
186	-65	195	Shipping	C's	0.2%	2.1%	-2.8%
187	-62	193	Money Center Banks	C's	-0.1%	0.6%	-1.7%
188	-73	204	Manufactured Housing	C's	1.0%	0.7%	-4.6%
189	-32	149	Basic Materials Wholesale	C's	0.1%	2.3%	-0.2%
190	-41	163	Biotechnology	C's	-0.6%	-3.8%	-3.5%
191	-49	178	Drug Related Products	C's	-0.7%	-6.4%	-8.1%
192	-56	186	Computers Wholesale	C's	0.5%	-10.2%	-6.1%
193	-91	209	Foreign Money Center Banks	C's	0.1%	1.8%	-1.1%
194	-66	196	Life Insurance	C's	0.4%	2.2%	-0.8%
195	-13	121	Real Estate Development	C's	-0.7%	-3.0%	-9.6%
196	-41	166	Asset Management	C's	0.5%	3.2%	-4.6%
197	-37	160	Property Management	C's	-0.4%	1.9%	-3.8%
198	-34	153	Movie Production, Theaters	C's	-0.1%	-6.9%	-8.0%
199	-67	198	Electric Utilities	C's	-0.7%	2.0%	-4.0%
200	-73	203	Air Services, Other	C's	1.2%	2.0%	-1.1%
201	-81	207	Regional - Northeast Banks	C's	-0.1%	-0.6%	-2.4%
202	-46	172	Diversified Utilities	C's	-0.5%	2.2%	-5.8%
203	-22	134	Semiconductor - Integrated Circuits	C's	-0.7%	-3.5%	-3.5%
204	-42	167	Computer Peripherals	C's	0.1%	-5.6%	-2.2%
205	-66	197	Research Services	C's	-0.4%	-4.9%	-3.9%
206	-4	104	Multimedia & Graphics Software	C's	-0.3%	-6.1%	-6.1%
207	-182	215	Internet Service Providers	C's	0.3%	-9.9%	-10.8%
208	-11	115	Computer Based Systems	C's	-0.6%	-17.0%	-13.9%
209	-148	214	Toy & Hobby Stores	C's	0.4%	-25.6%	-21.5%
210	-48	174	Beverages - Brewers	C's	1.5%	3.8%	-14.1%
211	-112	212	Wholesale, Other	C's	0.4%	-21.0%	-20.5%
212	-102	211	Security Software & Services	C's	-0.7%	-30.5%	-29.0%
213	-6	105	Dairy Products	C's	-0.7%	4.4%	-44.4%
214	-98	210	Broadcasting - Radio	C's	0.2%	-51.5%	-51.3%
215	-51	180	Nonmetallic Mineral Mining	C's	1.8%	7.1%	-50.8%

FIGURE 2

3.0 Industries Rising in Rank

Table 3 contains the industries that are moving up in position the fastest. The 20 fastest rising in rank are plotted in Figure 3.

Table 3

Industries Advancing in Rank the Fastest

May 18, 2007

Rank	Relative To Avg. Position	Rank of Position Change	Fastest Advancing Industries	Companies	Last Gain	1 wk Ago Gain	1 mo Gain
33	142	1	REIT - Office	C's	-1.2%	-0.7%	-0.7%
26	136	2	REIT - Diversified	C's	-1.7%	-1.0%	0.3%
21	131	3	REIT - Hotel/Motel	C's	-1.2%	-1.6%	0.2%
51	130	4	REIT - Industrial	C's	-1.6%	-1.1%	-1.7%
2	129	5	Home Furnishing Stores	C's	-0.5%	39.7%	31.2%
68	121	6	REIT - Retail	C's	-2.4%	-2.3%	-3.9%
10	119	7	Diagnostic Substances	C's	-0.1%	3.4%	3.6%
23	118	8	Drug Manufacturers - Other	C's	-0.5%	7.3%	6.7%
29	112	9	Technical & System Software	C's	-0.6%	6.8%	7.1%
17	110	10	Semiconductor - Specialized	C's	-0.2%	10.9%	10.7%
79	109	11	REIT - Healthcare Facilities	C's	-1.9%	-2.6%	-4.4%
66	97	12	Semiconductor Equipment & Materials	C's	0.2%	6.2%	5.9%
13	96	13	Hospitals	C's	-0.3%	4.6%	7.0%
36	93	14	Medical Equipment Wholesale	C's	-0.2%	0.7%	2.5%
18	88	15	Regional - Pacific Banks	C's	0.1%	6.4%	6.8%
4	81	16	Sporting Goods	C's	-0.3%	15.0%	18.9%
74	78	17	Department Stores	C's	-0.4%	-0.8%	-3.3%
14	77	18	Discount, Variety Stores	C's	-0.3%	-0.6%	4.3%
5	76	19	Medical Laboratories & Research	C's	0.0%	7.7%	10.4%
43	75	20	Air Delivery & Freight Services	C's	-1.2%	1.0%	3.2%
41	70	21	Personal Products	C's	-0.9%	-1.6%	-2.4%
16	70	22	Industrial Metals & Minerals	C's	0.2%	4.0%	10.8%
86	69	23	Confectioners	C's	0.3%	-0.1%	-1.1%
48	68	24	Printed Circuit Boards	C's	0.0%	0.6%	0.7%
19	68	25	Resorts & Casinos	C's	0.0%	0.9%	8.5%
58	67	26	Closed-End Fund - Debt	C's	-0.1%	1.3%	-1.0%
60	67	27	Diversified Machinery	C's	0.0%	3.3%	6.1%
12	64	29	Semiconductor - Broad Line	C's	0.3%	4.9%	2.3%
54	64	28	Regional - Southwest Banks	C's	0.0%	3.5%	2.5%
77	64	30	Diversified Electronics	C's	-0.4%	0.9%	4.7%
3	63	31	Home Health Care	C's	0.2%	15.4%	17.7%
75	58	32	Housewares & Accessories	C's	0.4%	1.0%	-0.2%
135	58	34	Music & Video Stores	C's	1.0%	-1.3%	-3.6%
49	58	33	Business Software & Services	C's	-0.4%	3.2%	4.4%
25	56	35	Long-Term Care Facilities	C's	-0.9%	0.5%	1.5%
1	56	36	Synthetics	C's	1.2%	43.4%	41.4%
40	54	37	Credit Services	C's	-0.6%	-0.2%	0.3%
6	52	38	Agricultural Chemicals	C's	1.2%	6.4%	6.2%
90	52	39	Medical Practitioners	C's	-0.1%	0.5%	3.7%
11	51	40	REIT - Residential	C's	-1.2%	-0.6%	4.3%

FIGURE 3

4.0 Industries Falling in Rank

A list of the industries declining in rank the fastest looks similar in Table 4. The 20 fastest declining in rank are plotted in Figure 4.

Table 4

Industries Declining in Rank the Fastest

May 18, 2007

Rank

Relative To Avg. Position

Rank of Position Change

Fastest Declining Industries