In Search of Winning Stocks

This Week: Stocks That May Top Expectations

1.  Screening for Stocks That May Top Expectations
2.  Search Criteria
3.  One Stock That May Top Expectations
4.  Disclaimer

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Wall Street City's Stock Search of the Week

1.  Screening for Stocks That May Top Expectations

The primary focus of this earnings season will not be so
much on how companies performed during the fourth quarter,
but rather what their 2002 guidance is.  Valuation levels
for many stocks have risen materially over the past few
months on the anticipation of an economic rebound occurring
this year.  In order for these valuation levels to be
sustained, earnings will have to show a dramatic improvement.
Those companies that issue better than expected earnings
results and guidance may be the ones to receive the most
favorable attention from investors over the coming the
months.  Stocks With Rising Earnings Estimates That May Top
Expectations identifies such companies.

The search strategy is built around two key criteria - a
streak of at least four consecutive quarters of positive
earnings surprises and a recent upward revision in the
earnings forecast for the current year.  The first criterion
establishes that a precedent exists for the company to top
expectations, while the second criterion suggests that
business conditions have continued to improve.  Combining
these two criteria results a list of companies that are
continuing to thrive in the current climate and have a track
record of beating analyst estimates.

Using the two criteria by themselves would result in a
limited list of stocks, but to improve the validity of the
search, we added four additional criteria.  Earnings
estimates from a minimum of four analysts were required to
limit the skewing effects of one overly bullish analyst on
the earnings forecast for the current year.  Four quarters
of revenue growth was required limit the results to only
those companies that increasing the topline and not just
relying on cost-cutting measures to improve profits.
Similarly, requiring a sequential positive change in
revenue between the previous two quarters, suggests that
the sales growth curve has not been reversed by the
recession.  Three-week relative performance of no less than
80 percent was required to eliminate those companies may
have dropped precipitously over the past few weeks -
precipitous drops suggest that sentiment is against a
positive earnings announcement.

The strategy is designed for both active traders and
long-term investors who are looking for investment ideas.
The strategy can be used as often as on a daily basis, though
it works well when run on a weekly basis as well.

Investors can click below to see the current results.

http://clyde.investools.com/T/A28.146.1016.1.113719

2.  Search Criteria

By subscribing to Wall Street City, investors can utilize
Power ProSearch to build a search like the one below,
created by Wall Street City analysts, to identify stocks
with rising earnings estimates that could report better than
expected profits.

Indicator                     Mode
------------------------------------------------------------
EPS Increase Last 4-Qtr       Between 4.0 - 4.0
Proj EPS 1-Mth Change CFY     Between 0.1 - 1,000.0, High
Analysts No. Cur FY           Between 4.0 - 1,000
Rev. Increase Last 4-Qtr      Between 4.0 - 4.0
Rev. Increase Last Qtr        Between 100.1 - 99999.9
Rel Performance 3-Wk          Between 80.0 - 99999.9

http://clyde.investools.com/T/A28.146.1016.2.113719

3.  One Stock That May Top Expectations

Overture Services {OVER} has topped analyst estimates every
quarter since it turned public in 1999.  Safa Raschty at US
Bancorp Piper Jaffray predicted in a report yesterday,
"Overture will post very strong Q4 results, substantially
above the Company's guidance range and in-line to ahead of
our high-on-the Street estimate of $84.2 million in revenues
and $0.21 EPS".  OVER is one of the few Internet success
stories, providing a differentiated search engine platform.
Companies pay OVER to be listed near the top of its search
results for any given subject, thereby reaching an extremely
targeted audience.

Investors can click below to view the search stategy's
results.

http://clyde.investools.com/T/A28.146.1016.3.113719

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4.	Disclaimer

WallStreetCity's Stock Search of the Week is published
solely for informational purposes and is not a solicitation
or an offer to buy or sell any stock, mutual fund or other
security.  The information obtained from internal and
external sources is considered reliable, but has not been
independently verified for accuracy and completeness.
WallStreetCity, its employees, and/or officers and directors,
may from time to time have a position in the securities
mentioned and may sell or buy such securities.
Trading involves risk, including possible loss of principle
and other losses.  Trading results may vary. No
representations are being made that these techniques will
result in or guarantee profits in trading.  Past performance
is no indication of future results.

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