This file contains Peter Zweigs three (3) handouts presented at

the Petaluma IBD Meetup on Wednesday, September 12, 2012.

1. How I Use IBDs Stock Checkup, page 2 below.
2. Stock Checkup Criteria, page 3.
3. IBD Stock Checkup Analyzing Worksheet

Thank you Peter.

This is a link to the IBD Stock Checkup:
http://research.investors.com/StockCheckup.aspx

How I use IBDs Stock Checkup

Peter

Zweig 9/11/12
pzweig@sonic.net
I review IBDs Weekly Review, IBD 50, and Big Cap 20 mini-charts and eliminate stocks with:
Industry Group > 40; Average Daily Volume < 500,000; weak fundamentals (ROE < 17%,
annual OR quarterly EPS growth or last quarter sales < 25%); extended stocks; stocks not in
a base; and stocks in a later-stage bases. I read the mini-chart comment for the buy point.
(See also the list of Sector Leaders and Stocks Just Out of Bases on page B1 or B3 for an
instant watchlist.)
I run this short watchlist through IBDs Stock Checkup and eliminate stocks that are: not #1 or
#1 in its Industry Group; if the stocks has more than four fundamental red lights or two
technical red lights. I check the weekly chart for prior uptrend, proper base, and buy point. I
check the daily chart for the breakout from a proper base in strong volume.
My idea is to eliminate ALL weak and mediocre stocks and MANY good stocks to end up with a
very small number of top stocks from my short watchlist to create an even smaller buylist.
Page 2 of this handout lists all of the IBD Stock Checkup criteria and the limit to give the criteria
a green light. I have added a column where my criteria are different from IBDs.
Page 3 is a typed up version of my usually handwritten Stock Checkup Analyzing Worksheet.
Bold ticker is a strong stock. Bold entries in the field are positive. Underlined entries in the
field are negatives which can eliminate the stock from the watchlist.
My questions, which I would like to open up to discussion if we have time, are these:
1. Does everyone use the Stock Checkup? Why or why not? Is it working for you?
2. Are there criteria on the Stock Checkup List that are make-or-break criteria? For example,
stocks dont even get on my watchlist if their Group Number is > 40, their ADV is < 500,000,
their ROE is < 17%, or their current quarter or annual EPS or last quarter sales are < 25%.
And the stock has to be breaking out of a sound base and the market has to be in an uptrend
for me to consider buying individual stocks. My make-or-break criteria are bold. Am I being
too critical? I am being to lenient?

3. Is my criteria to eliminate a stock if there are more than 4 fundamental red lights or two
technical red lights too simplistic? Should some criteria be given more weight than other
criteria?
4. Would a stock (like KORS or ALXN recently) with all green be an automatic buy (as it
breaks out of a proper base while the market is in an uptrend)? All greens is very rare.

IBD Stock Check-Up Criteria

Heading:
Performance
Within Group:

9/12
CANSLIM & 20 rules
Recommendation: (PZ):

Indicator:
Group Leaders (L)
Composite rating (CANSLI)
EPS rating (CA)
RS rating (L)
SMR rating
Acc/dis rating (I)

General Market
& Industry Group:

Market (M)
Industry group rank (L)
Fundamental Performance:
Current earnings: EPS rating (C)
Last quarter EPS % change (A)
Last 3 quarters EPS growth (A)
Number quarters EPS acceleration (A)
Next quarter EPS % change
Estimate revisions
Last quarter earnings surprise
Annual earnings:
3 year EPS growth rate (A)
Consecutive years annual EPS growth
Estimated annual EPS growth
SMR:
SMR rating
Last quarter sales % change
3 year sales growth rate
Annual pre-tax margin
Annual ROE
Debt/Equity ratio
Technical Performance:
Price per share
RS rating
% off 52 week high (N)
Price vs. 50 day moving average
50 day average volume
4

#1 or #2
> 90
> 85
> 80
A or B
A or B

(99)
(>90)

in uptrend
< 20
(<40)
> 85
> 25 %
> 25 %
>1
> 25 %
up
>5%
> 25 %
> 3
> 25 %
A or B
> 25 %
> 25 %
> 15 %
> 17 %
< 100 % (no debt)
>$15
> 80 %
(>90)
< 15 %
-5% to +60%
> 300,000 (>500K)

Supply & Demand: Market capitalization

Acc/Dis rate (I)
Up/down volume
% change in funds owning stock (I)
Qtrs of increasing fund ownership (I)
Chart

> $1 B
A or B
>1
>1%
>1
breaking out

IBD Stock Checkup Analyzing Worksheet

Peter Zweig 9/12
pzweig@sonic.net

Date: 9-5-12
50 day
Ticker Comp. # in # of # of Group #Fund #Tech A.D.V.
Rate Grp. Green Bests Rank Reds Reds (,000) ($B)

Mkt.
Cap chart buy
action point decision

CBST

98

798

ALXN

99

1.3M 21

DVA

97

781

9.5

VAL

95

964

4.8

no

SHW

97

1.1M 14

no

SWI

99

1.2

4.3

BO 56.9 RAX = btr

RAX

99

1.8

8.4

BO 60

ROST

99

13

2.1M 15

TJX

98

13

4.6M 33

ESRX

99

14

5M

30

EW

97

n/a

20

769

12

LNKD

99

23

2.7M 12

BO

113

AAPL

99

27

13.7M 628

BO

650

add?

SNI

98

30

947

BO

57.8

no

WPI

98

38

1.5M 11

BO

81.1

add?

BO

44.7

no

110

add?

90.2

no

buy
no

BO

46.8

no

59.1

buy
no

TSCO

96

64

935

93.8

no

Ranked by Industry Group Relative Strength (see page 324 4 th ed How to Make Money in
Stocks). Underline is bad. Bold is good. BO = breakout.
I ended up buying VOT, XIV and TNA. CANSLIM stocks are AAPL, GOOG, ALXN, CRUS,
and WPI. ETFs VO, VB, SPXL, VOT, TNA and XIV. Overall portfolio is up 24.8% YTD.