If you want to be a investor in the stock market, you may be asking yourself, how do I select stocks that will provide the best return for my portfolio? That is certainly a concern for many investors considering the recent ups and downs of the stock market. It is a difficult process of finding the correct stock selection. Following are some Stock tips and ideas for you to consider with your stock selections.

A book written by James P. O’Shaughnessy entitled “What works on Wall Street: A Guide to the Best Performing Investment Strategies of All Time” He did an extensive amount of research for this book. He took various investment strategies and then reviewed fifty years of data to determine which strategy worked the best. One of the main ideas he came up with was that an investor who is selecting stocks should look for rapidly-growing companies that are cheaply valued. That would mean that they are good solid companies that may have recently fallen out of favor for some reason, but they are still positioned for long-term rapid growth.

One of the ways you can find these stocks is to use a screening tool. There is a fairly extensive screening tool which can be found at http://mystocktradingtips.com/tools/. Some tips on which fields to filter on would be the stock price field. I entered a range between 6 and 35. You also want to filter for stocks that have a large amount of trading volume. I filtered for the “volume 30 day average” of 500,000. Under the fundamental section I selected .1 for the EPS basic. I then looked for earnings per share growth so I filtered the EPS Growth for 1 year and 4 year at 60%. I then wanted to make sure the stocks were cheaply valued so I filtered the PE ratio to be between 7 and 21 and the cash/price ratio of .1

The reason I selected a filter for the cash/price ratio was because you also want to find those companies which have a fair amount of cash available. Earnings can be manipulated but cash cannot. Cash does not lie. One formula you can also use is to take the cash from operations for the past twelve months. You can then divide this by the amount of outstanding shares and then divide this into the stock price. The figure you arrive at should be a single digit figure. Another item you should review for is that the cash from operations is higher than the reported net income.

Investing in small companies is another stock selection tip. Smaller companies that have a good track record as defined above will have the potential for a greater amount of growth. First, they are smaller so the amount of growth required is smaller for a percentage growth. Second, since they are smaller, they can move more quickly to take advantage of opportunities. The management team may also be more tuned to aggressively growing the company.

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