There are basically two different types of investors. There are the informed investors such as the insiders and those who have access to the corporate information as it hits the wire and then there are the uninformed investors who have to get their information after it has already been factored into the stock price. The trick in obtaining winning stock picks is to be able to be linked in some way to being one of the first to act on good financial news. Learning how to perform stock picking like the institutional players is one avenue toward finding those winning stock picks that will be able to make you money with your stock market investing.

One of the important things to consider with your stock picks is how the earnings have performed against the analysts expectations. Analysts spend a lot of time researching companies and discussing the company with the investor relations personnel. Investors relations departments are set up to always strive to put the best foot forward. So what they say needs to be taken with a grain of salt. However, they also realize how the game is played. They know that they want their earnings report to come close to what the analysts are predicting. If they are consistently high, then they will not be trusted. If they come in below the prediction, then their stock price will get slammed. Therefore, if there is going to be any kind of significant change to the prediction, that change gets leaked to the analysts.

Surprise earnings is one method that can be used to determine if an investor should look into a stock further. Surprise earnings are when the actual earnings report comes in above the expected earnings. The thinking amongst investors is that earnings surprises are kind of like cockroaches. If you see one, then there is a good chance there will be more to come. Therefore, if a company has a positive surprise earnings then you should watch that company closely.

Forecast trends is another thing to watch. If an analyst increases his prediction of what a companies earnings is going to be, then other analysts take notice. They do not want to be left behind in their predictions. If a change happens, then they also will look into why that change came about. They will be doing further analysis. If you see two or more analysts predictions change, then you should certainly be looking into that stock as a potential investment.

Another ratio to review is the PEG ratio. This ratio is a valuation gauge which compares P/E growth to forecasted growth. It is usually the case that stocks with a PEG ratio below 1 are considered undervalued while PEG ratios above 2 are considered overvalued. This may not always be the case, but it certainly bears looking further when this is found.

Winning stock picks like the institutional players is the direction that we should all be striving to achieve. By accomplishing this task, we may be further along the road to finding those legitimate stocks amongst the thousands that exist in the stock market.

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