1. Is the stock selling near the low end of its 52 week price range?
2. Is the company in an industry that had been depressed lately but where the outlook is improving?
3. Has the company announced an intent to sell off unprofitable operations or restructure in some way?
4. Has the company brought in new top-level management?
5. Is the company making large capital expenditure in plant, equipment, new ventures, research etc?
6. Are revenues beginning to grow?
7. Is the operating profit margin beginning to improve?
Five or more yes answers means the company is a potential buy.
1. Is the economy getting weak?
2. Is inflation accelerating?
3. Do most analysts expect company profits to stagnate or decline?
4. Are interest rates for Bonds rising?
5. Has the Federal Government been tightening monetary supply?
6. Are friends and business associates euphoric about the market?
7. Is the volume of trading decreasing on days when prices are rising and increasing when prices are declining?
8. Have stocks been rising for at least 2.5 years since the last cyclical low?
9. Has the market dropped below its recent high, climbed back a few times only to retreat again?
10. Are there fewer stocks hitting new highs each time the market as a whole reaches a new high?