Stock Picking Process

Securities offered through LPL Financial. Member FINRA/SIPC. Stock investing involves risk including loss of principal.

Our Objective

To reduce the universe of all possible stocks in the market to the top 25 stocks that provide a

high probability of success.

No strategy can assure success or guarantee against loss in declining markets. General risks inherent to investments in stocks include the fluctuation of market prices and dividend, loss of principal, market price at sell

may be more or less than initial cost and potential illiquidity of the investment in a falling market

Master List Top 400 Stocks

Scoring Process

Final List TOP 25 STOCKS

Popular Lists

Ultimate List Top 100 Stocks

Analyst FavoritesCategory

Value Categor

y

Growth Category

Sentiment Category

Second Screen

Quality Category

Screen-Based List Current List

First Screen

INVESTING UNIVERSE

400

Investing Universe

10,000+ Stocks

25 Stock Stars

Ultimate List

100 Stocks

100

Master List

400 Stocks

INVESTING UNIVERSE

First ScreenThree Evaluation

Lists

Current List:- Current

Nominees- Personal

Nominees

Screen-Based List:

- Value Screen- Growth Screen- Momentum

Screen

Master ListTOP 400 Stocks

Popular List:- Top 50 stocks

IBD- Top 100 stocks

VL- Top 36 stocks

SS- Top 37 stocks

MS- Top 50 stocks B

INVESTING UNIVERSE

First ScreenThree Evaluation Lists

Current List:- Current Nominees- Personal

Nominees

Screen-Based List:- Value Screen- Growth Screen- Momentum Screen

Master ListTOP 400 Stocks

Popular List:- Top 50 stocks IBD- Top 100 stocks VL- Top 36 stocks SS- Top 37 stocks MS- Top 50 stocks B

SCREEN-BASED LIST

Investment Style:VALUE Screen Tests

Investment Style:MOMENTUM Screen Tests

Growth Screen 2

Comparative & Financial

Strength

Stock Screener

Growth Screen 1

Relative Growth

Value Screen 1

Relative Value

Value Screen 2

Comparative Value & Growth

ValueScreen 3

Contrarian Opportunities

Growth Screen 3

Comparative & Sustainable

Growth

Momentum Screen 2

Moving Average & Behavioral

Momentum Screen 3

Relative Momentum

Investment Style:GROWTH Screen Tests

Momentum Screen 1

Relative Strength

Stock Screener Stock Screener

Screen-Based Tests *

*The formulas have been altered to protect Proprietary Information

1. P/E Ratio <= Indy. Avg. P/E2. Price/Sales <= Indy. Avg. P/S3. TTM ROE > Indy. Avg. TTM ROE4. TTM ROE > 05. 5 y Avg. ROE > 5 Y Indy. Avg. ROE6. LT Debt/Equity ratio <= Indy. Avg. LT Debt

Ratio7. Price/Book <= 38. EPS Growth Est. > Indy. Avg. EPS Growth Est.9. Y1 EPS Est. Growth > 0

Value Screen 2: Comparative Value

FIELDOPERATO

R COMPARE TO: STOCKSP/E Ratio <= Indy. Avg. P/E 2190

Price/Sales <= Indy. Avg. P/S 3581TTM ROE > Indy. Avg. TTM ROE 4464TTM ROE > 0 5909

5 Y Avg. ROE > 5 Y Indy. Avg. ROE 3452LT Debt/Equity

Ratio <=Indy. Avg. LT

Debt/Equity Ratio 3864

Price/Book <=Average Price/Book

Ratio 5459

EPS Growth Est. >Indy. Avg. EPS Growth

Est. 12361Y EPS Est.

Growth > 0 832

Screen Results: Value Screen 2

Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lee Johnson Capital Management, LLC (LJCM). LJCM is an independent Registered Investment Advisor and is not affiliated with Triad Advisors.

7 COMPANIES MET THE CRITERIA: AS OF February 28, 2013 COMPANY NAME SYMBOL SECTOR

MYR Group Inc MYRG Capital GoodsVirtusa Corporation VRTU Technology

Assurant, Inc. AIZ FinancialHub Group Inc HUBG Transportation

Jones Lang LaSalle Inc JLL ServicesKulicke and Soffa Industries KLIC TechnologyUSANA Health Sciences, Inc. USNA Conglomerates

INVESTING UNIVERSE10,000 + Stocks

Master List TOP 400 Stocks

First Screen

Second Screen

Analyst FavoritesCategory:

1.Most Repeated

Stocks

Value Category

:1.Catchin

g Up Stocks

Quality Category

:1.Industry Leaders2.Fastest Turnover

Growth Category:1.Historical comparison2.Industry

Comparison

Sentiment Category:1.High P/E Multiples

2.Institutional

Ownership

Second Screen

Master List Top 400 Stocks

Second Screen*

*The formulas have been altered to protect Proprietary Information

Third Screen

Ultimate List: Top 100

Scoring Process:- Growth Score- Profitability Score- Financial Health

Score- Momentum Score

Stock Stars ListTOP PROBABILITY STOCKS

• %Chg = Percentage Change.

• 1Q = Recent quarter.

• Asset turnover = The amount of sales generated for every dollar’s worth of assets.

• CF = Cash Flow: a revenue or expense stream that changes a cash account over a given period.

• Current Ratio = A liquidity ratio that measures a company’s ability to pay short-term obligations.

• D = Days (example: 27D=27 Days)

• EPS = Earnings Per Share: the portion of a company’s profit allocated to each outstanding share of

common stock.

• EPS Est. = An analyst’s estimate for a company’s future annual EPS.

• FCF = Free Cash Flow: a measure of financial performance calculated as operating cash flow minus

capital expenditures.

• Gr. = Growth.

• Inventory Turnover = A ratio showing how many times a company’s inventory is sold and replaced

over a period.

• LT Debt/Equity Ratio = Long-Term Debt/Equity Ratio: a measure of a company’s financial leverage

calculated by dividing its long-term debt by stockholders’ equity.

• Net Income = A company’s total earnings (or profit).

• Net Margin = The ratio of net profits to revenues for a company, expressed as a percentage.

• Price/Book Ratio = A ratio used to compare a stock’s market value to its book value.

• P/E = Price to Earnings Ratio: A valuation ratio of a company’s current share price compared to its

per-share earnings.

• P/FCF = Price to Free Cash Flow Ratio: A valuation metric that compares a company’s market

price to its level of annual free cash flow.

Glossary of Screen-Based Tests

Investopedia AAII

• P/S = Price to Sales Ratio: A ratio for valuing a stock relative to its own past performance,

comparing a company’s market price to its level of annual revenue.

• Pr = Price (example: Pr4D%Chg=Four day price percentage change)

• Price/CF = Price to Cash Flow: A measure of the market’s expectations of a firm’s future

financial health.

• Q1 = Present quarter

• Q2 = One quarter prior to the present quarter

• Q3 = Two quarters prior to the present quarter

• Q4 = Three quarters prior to the present quarter

• Q5 = Four quarters prior to the present quarter

• Q6 = Five quarter quarters prior to the present quarter

• Relative Strength = A measure of price trend that indicates how a stock is performing relative

to other stocks in its industry.

• ROA = Return on Assets: an indicator of how profitable a company is relative to its total assets.

• ROE = Return on Equity: the amount of net income returned as a percentage of shareholders

equity.

• ROI = Return on Investment: A performance measure used to evaluate the efficiency of an

investment. The return of an investment is divided by the cost of the investment.

• TTM = Trailing Twelve Months: The timeframe of the past 12 months used for reporting

financial figures.

• Turnover = The number of times an asset is replaced during a financial period.

• W = Weeks (example: 52W=52 Weeks)

• Y1 = Recent Year

• Y = Yearly (example: Y EPS= Yearly EPS), or Years (example: 3Y= 3 Years)

InvestopediaAAII

Glossary of Screen-Based Tests