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Stock Guide // 2019 Q1

With a new year just beginning, it’s a good time to review your investing

process. In this edition of the MarketSmith® Stock Guide, we’re starting

2019 by covering a smarter strategy you can use when buying stocks.

If you’re not pyramiding into your positions, you could be risking more

than necessary if a trade goes against you. Check out our main article to

find out how it works.

For our featured interview in December, we talked to bestselling author and

investing champion Mark Minervini. In addition to winning the U.S. Investing

Championship and being featured in the book Stock Market Wizards, Mark

is a longtime MarketSmith subscriber who has used the platform for years

to find new stocks. He shares some insights picked up during 30+ years of

investing, including how to leave emotions out of investing and trade like a

Wall Street veteran.

In the Coaches Corner, we interviewed Nikkolas Rosales, the newest

member of the MarketSmith coaching team. Nikkolas is an active trader

who watches the market from open to close, so he’s got quite a few insights

about investing. He also shared a custom screen he uses to find potential

new buys in MarketSmith.

As always, if you have any questions or comments about your investing

research or any MarketSmith features, please call one of our product

coaches at (800) 831-2525 or email us at [email protected]. We’re here to help you make more money in the market.

Best Returns,

The MarketSmith Team

2

MarketSmith.com // 2019 Q1

S & P 500 INDEXCLOSE 2506.85

2872.87

2801.90

2717.49

2791.47

2916.502940.91

2815.152800.182800.18

2532.692553.80

2594.62

2691.99

2603.54

50 DAY MOVING AVERAGE


2250

2350

2450

2550

2650

2750

2850

2950

3050

DAILY VOLUME AND 50-DAY AVERAGE DAILY VOLUME LINE

500 M

850 M

1.4 B

2.5 B

2172392612281431173206228251127133016216219522

DECNOVOCTSEPAUGJULJUNMAYAPRMARFEBJAN 2018

NASDAQ COMPOSITECLOSE 6635.28

7505.77

7637.27

7319.58

7806.60

7933.31

8133.30 8107.38

7486.517486.51

6630.67

6805.96

7419.56

7604.24

6922.83

6830.76



6200

6400

6600

6800

7000

7200

7400

7600

7800

8000

8200

8400

DAILY VOLUME AND 50-DAY AVERAGE DAILY VOLUME LINE

850 M

1.6 B

2.5 B

4 B

2172392612281431173206228251127133016216219522

DECNOVOCTSEPAUGJULJUNMAYAPRMARFEBJAN 2018

S&P 500 Index

NASDAQ Composite

3

*All screen results are computer-generated and were run on December 31, 2018.

Market Charts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

How to Build a Full Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

A Conversation with Mark Minervini . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5-Month Trend Template* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Attunity Ltd (ATTU) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Acorn Intl Inc Ads (ATV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

BioTelemetry Inc (BEAT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Caredx Inc (CDNA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Coaches Corner: Nikkolas Rosales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

High Growth Potential* . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Cyberark Software Ltd (CYBR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Fortinet Inc (FTNT) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Medpace Holdings Inc (MEDP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Medical Properties Trust (MPW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Servicenow Inc (NOW) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Nexstar Media Group Cl A (NXST) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Features Highlight: The New Markup Tool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Connect with Us . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Table of Contents

4


You found a great stock. It’s on the verge of a proper buy point. All that’s

left to do is set an alert and buy your position, right? Not so fast.

The truth is, any stock trade can go against you. You may have reams of

research that point to one stock as the biggest thing since Amazon, but

any stock can fail to break out or trigger a sell signal after hitting your buy

point. That’s where scaling into a position can help.

This buying strategy is called pyramiding: building a full position in

installments as a stock increases in price. This strategy was developed

by the legendary investor Jesse Livermore as a way to reduce risk and

increase cumulative returns. So how does it work?

The concept behind pyramiding is called “averaging up,” and it’s a simple

concept that is often overlooked because it seems counterintuitive. After

all, why wait for a stock to become more expensive before buying more?

The thing is, pyramiding is totally intuitive: you reward stocks that prove they can go higher by buying more. You’re adding more on the way up

instead of adding on the way down toward a sell signal. As William O’Neil

wrote in How to Make Money in Stocks, “Why add more of your hard-

earned money to stocks that aren’t working?”

First, find the stock you want to buy. Wait for it to hit a proper buy point.

Figure out what your full position size is for this stock; in this example, let’s

say our full position size is $10,000.

Feature Article:

How to Build a Full Position

5


Step 1: Buy a 50% position (in this example, $5,000) as close to the buy

point as possible, then wait. You want to make the stock prove itself by

increasing in price.

Step 2: When the stock goes up 2% to 2.5% from your initial purchase

price, buy 30% of your allotted position size (in this example, $3,000). Now

you’re at 80% of your full position.

Step 3: Finish building out your position by buying 20% of your full position (example: $2,000) when the stock rises an additional 2% to 2.5%

from your initial purchase price.

(continued)

Always calculate your initial position size by total monetary value, not by a set number of shares. Otherwise, your positions can vary wildly and put too much weight on a single position if its share price is much higher than others in your portfolio.

20% of target investment limit - Only have full positions on those names that are proving themselves.

30% of target investment limit - Only add to a position that is working.

50% of target investment limit - Pull the trigger as close to the pivot point as possible. You’ve already done your research.

6


(conti nued) How Pyramiding Minimizes Risk

In this example, say the stock you bought dropped 8% and triggered your

stop loss. If you bought a full position at the buy point, you would have lost

$800 (8% of $10,000). By pyramiding into the position, your 50% initial

position size would only lead to a $400 loss. This strategy can literally

halve your losses on losing trades.

To recap, pyramiding is a buying strategy where you build a full position in

3 installments: 50%, 30%, then the fi nal 20%. If you buy as close to the buy

point as possible, you’ve built a full position within 5% of the pivot, before

the stock gets extended.

An Example of Pyramiding: OLLI broke out of a Flat base in August 2018. Here’s a chart showing how one of the MarketSmith Coaches would scale into the positi on.

7

Mark Minervini is one of America’s

most successful traders. A veteran

of Wall Street for 35 years, he’s the

bestselling author of several books,

including Think & Trade Like a Champion

and Trade Like a Stock Market Wizard.

He’s also a long-time MarketSmith

member and has used the platform

for years to find many of his winning

stocks. We recently spoke with Mark

about how he trades, what he avoids

and how he maintains his focus.

Q: How do you avoid making emotional trading decisions in the heat of battle?

The main thing is to have rules. That’s something that I heard Bill O’Neil say

a thousand times. Specific rules and criteria for buying and selling, that’s

the first thing you need. You’re going to be able to learn the correct criteria

if you pick up O’Neil’s book and if you pick up my book. If you read both of

those books, you’re going to get all the rules you need for buying, selling,

for everything. Instead of reading 40 or 50 books, it’s probably better to

read our books 20 times each and master an already proven strategy.

To avoid the emotions of trading, I avoid calling “audibles” or making

decisions on the fly during trading hours. Do your homework the night

before, when things are quiet. That’s when you run your MarketSmith

screens and make your list of buy candidates. Before the market open, I

already know the stocks I’m interested in and at what price I’m a buyer. I

also know precisely where I’m getting out of all my positions in the event

they move against me. All of these decisions are already determined before

I enter a trade.

A Conversation with Mark Minervini


8


Say a stock gaps up and runs away from your buy point. You stay away; you

don’t chase it. You’ve got your price range where you’re willing to buy. You

go in with a plan and you stick to it. Then you can determine how did things

work out and if you should adjust your plan.

But you’re doing all that outside market hours. When you’re in the market,

you’re focused on execution and position management—managing the

current stock positions and adhering to your stops.

Now, some people will say, “I’ve done all that, but I can’t sleep at night. I’m a

nervous wreck.” Well, then you’re probably trading too large. We call it the

“pillow factor.” Sell down to the sleeping point: a level where you can sleep

on the trade and not worry about holding it overnight.

In the beginning you might be a little more nervous and jumpier because

you’re not experienced at trading yet. So, you’re going to trade with a smaller

amount of money and smaller positions. As you get better and backlog some

profits, you can finance larger risk trades with those profits and be less

worried about the fluctuations.

Q: Sometimes the best trades are the ones you don’t make. Can you think of a time in 2018 where you avoided a big loss by sitting out a potential trade?

In January 2018, I viewed Bitcoin essentially as a tulip bulb mania about to

unwind. I had people who had not contacted me in 20 years calling me daily

asking if they should buy, friends and relatives that never owned a stock in

their lives. It felt obvious to me that Bitcoin was due for a major correction.

My call at the time was for a 50-80% correction. I think it corrected 84%.

Fortunately, I stayed away.

I was buying Amazon in 1997, Netflix in 2010 and Apple in 2004, not in 2018. The FANGs are late-stage leaders at this point.

9

As for the FANG stocks, it was a similar story. Everyone I knew kept asking

me about them; it felt like it was 1999 all over again. It seemed like everyone

in the market was buying the FANG names like they would never stop

growing.

If you want to fi nd big stock market winners, you want to focus on fi nding

new leadership. You have to develop the discipline and have the courage

to look for names that are new that you may not have heard of. That’s

where the big potential is, not in “yester-years” leaders of the past that are

“crowded” and over-owned.

Q: You created 1-Month and 5-Month Trend Templates to fi nd new stock ideas in MarketSmith. How do you use these templates to fi nd new trading ideas as part of your research routi ne?

The 1-Month Template is sort of a “heads up” screen I developed, where

you’re able to see the early turn in a stock as it starts to transition into an

Pictured: Bitcoin Investment Trust (GBTC), an ETF that seeks to track the performance of the cryptocurrency Bitcoin.

Bitcoin Investment Trust (GBTC)

10


uptrend. The 200-day moving average has only been trending for 1 month.

That gives some lead time if you start watching and see if it confirms and

ends up rolling over to the 5-Month Template. The other thing, too: high-

tight flags, your power play patterns, will sometimes run up very quickly

and they don’t give the 5-month template enough time to pick it up. So,

you can pick up a lot of high-tight flags in the 1-Month.

The 5-Month Template is my main qualifier. These are stocks that have

had their 200-day moving average trending up for at least 5 months. The

names that show up on this screen (the ones that have proved themselves

to be in a Stage 2 uptrend) are the ones I watch closely and consider

buying, but only if they emerge from a constructive base.

Q: You’ve seen a lot in your 30+ years of trading. How do you keep your edge and stay ahead of changing market environments?

I still wake up every day excited about trading. I’m doing the same things

now that I was doing 30 years ago: following my rules. The beauty of

trading is that it’s not purely a science; it’s art and science, and you can’t

just mathematically figure it out in a spreadsheet. That’s why you’re

always going to be on-edge with trading. It’s like a game of golf— you

always want a hole-in-one, but that’s not going to happen. The challenge of

getting better and better at it keeps you motivated.

One thing I’ve learned over my 35-year career is, nothing has changed

very much in the market. Most traders don’t fail because of a lack of good

information, but simply a lack of discipline. If you learn sound rules and

develop a plan, you have a great chance to do very well.

Mark recently co-hosted a MarketSmith webinar where he talked about his investing strategies with Portfolio Manager David Ryan; you can stream it any time at investors.com/wizards.

11

Mark’s screen for stocks in a Stage 2 Uptrend.

These stocks have 200-day moving averages trending up for at least 5 months. It’s a sign of strength that Mark considers heavily when searching for new buys.

5-Month Trend Template

COMPANY (SYMBOL) INDUSTRY GROUP RS RATING PAGE

Att unity Ltd (ATTU) Computer Sft wr-Database 99 12

Acorn Intl Inc Ads (ATV) Retail-Mail Order&Direct 99 12

BioTelemetry Inc (BEAT) Medical-Services 99 13

Caredx Inc (CDNA) Medical-Products 99 13

Visit MarketSmith.com/learn/stockguide to load the criteria for this and other Stock Guide screens directly into your MarketSmith screener.

*All screen results are computer-generated and were run on December 31, 2018. This screen can also be found on

marketsmith.com in shared screens.

Screen created by Mark Minervini

12

Attunity Ltd (ATTU)

Acorn Intl Inc Ads (ATV)

ATTUNITY LTD(ATTU) NASDAQ 21.3 SHRS / 16.9 FLT / AVG VOL 318202 $19.68(OH -17%)COMPUTER SFTWR-DATABASE attunity.com

ISRAELI DEVELOPER OF ENTERPRISE DATA INTEGRATION AND MANAGEMENT SOFTWARE APPLICATIONS AND RELATED SERVICES. 11/18 RAISED 2018 REVENUES GUIDANCE TO $83 MIL TO $85 MIL.

SHORT INT .6 DAYS -14%OPTIONS ONUP/DOWN 1.9EX-DIVYIELD

GROWTH RATEEARNINGS STABEPS RANK 76PE 59 (3.5XS&P)5 YR PE 40 - 125

DEBT 0%NEW CEOTIMELINESS AACC/DIST BSMR RATING C

7.96 X BK VALUEINVENTORY TO.R&D 22.6%RET ON EQUITY N/ACASH FLOW $-0.06

FUNDS 6%BANKSMGMT 21%ALPHA 0.49BETA 1.15

7.49 7.68

12.39

22.11

23.85

6.516.97

16.79

14.3599

QTR 4QTR 3

QTR 2

QTR 1

5

10

15

20

PRICE SCALE

99COMPOSITE RATING(C)12$ 0.33 $ 9 213 0.12 11 414 0.10 12 515 0.09 16 816 -0.13 12 417 -0.10 9 518 0.46 EST ↑19 0.58 EST +26% ↑

EARNINGS (DEC) HI LOAlteryx A AYX 99 50Mongodb A MDB 99 25TableaSftr DATA 97 95Workiva A WK 97 35Splunk SPLK 89 79

GROUP REL STR 92 RS EPS

21723926122814311732062282511271330162162195DECNOVOCTSEPAUGJULJUNMAYAPRMARFEB

EARNINGS $SALES MIL. $DIVIDEND-PE

-0.01 VS 0.07 N/A18.3 VS 15.6 +17%N/A N/A

0.07 VS -0.02 #+450%18.2 VS 13.8 +32%N/A N/A

0.08 VS -0.12 #+167%19.8 VS 13.5 +47%N/A N/A

0.20 VS 0.04 +400%22.2 VS 16.5 +35%N/A 123X -- 77X

EPS DUE 2/1 QUARTER ENDED DEC 31,17 QUARTER ENDED MAR 31,18 QUARTER ENDED JUN 30,18 QUARTER ENDED SEP 30,18

R S LINE VS SP500

VOLUME

2 K

26 K

ACORN INTL INC ADS(ATV) NYSE 2.7 SHRS / 1.3 FLT / AVG VOL 6274 $21.90(OH -34%)RETAIL-MAIL ORDER&DIRECT acorninternationalir.com

CHINESE PROVIDER OF CONSUMER PRODUCTS AND MARKETING SERVICESVIA TV INFOMERCIALS AND A NATIONWIDE 8/18 GEOFFREY G. WEIJI RESIGNED AS CFO, EFFECTIVE IMMEDIATELY.

SHORT INT 1.1 DAYS -5%OPTIONS ON PHUP/DOWN 1.0EX-DIVYIELD

GROWTH RATEEARNINGS STABEPS RANK 67PE 3 (0.2XS&P)5 YR PE 2 - 181

DEBT 0%NEW CEO 11/17TIMELINESS AACC/DIST BSMR RATING B

0.73 X BK VALUEINVENTORY TO. 7.4XR&D N/ARET ON EQUITY 8%CASH FLOW $1.61

FUNDS 0%BANKSMGMT 52%ALPHA 0.51BETA 0.63

10.82 11.16

14.56

19.85

26.70

33.60

28.8328.83

9.07 9.10

12.3213.50

17.0218.58 18.00

99

QTR 4QTR 3

QTR 2

QTR 1

$DIS

196/100

0

10

20

30

PRICE SCALE

96COMPOSITE RATING(C)12$ -0.60 $ 16 713 -1.41 10 414 -1.62 10 415 -10.14∆ 10 016 0.91∆ 5 117 2.17 9 31819

EARNINGS (DEC) HI LOOne800FlrA FLWS 90 32QurateRetl QRTEA 48 72QurateRetl QRTEB 37 61Evine Live EVLV 2 14




0.01 VS -2.09∆ #+100%5.6 VS 6.1 -9%

N/A 125X -- 113X

0.01 VS 2.03 -100%5.4 VS 4.7 +16%

N/A 153X -- 4X

7.62∆ VS -0.71 #+11896.3 VS 4.5 +39%

$14.9 149X -- 4X

1.11 VS 0.84 +32%8.3 VS 6.0 +38%

N/A 181X -- 2X


R S LINE VS SP500

VOLUME

2 K

16 K

13

MarketSmith.com // 2019 Q1BioTelemetry Inc (BEAT)

Caredx Inc (CDNA)

* BIOTELEMETRY INC(BEAT) NASDAQ 33.3 SHRS / 30.3 FLT / AVG VOL 637850 $59.72(OH -20%)MEDICAL-SERVICES gobio.com

PROVIDES MEDICAL DEVICES, MONITORING SVCS AND CENTRALIZED CORE LABORATORY SERVICES FOR CLINICAL RESEARCH. 10/18 RAISED 2018 REVENUES GUIDANCE TO $397 MIL TO $400 MIL.

SHORT INT 4.4 DAYS -7%OPTIONS ON AM/NYUP/DOWN 1.2EX-DIVYIELD

GROWTH RATE +119%EARNINGS STAB 49EPS RANK 99PE 35 (2.0XS&P)5 YR PE 20 - 240

DEBT 79%NEW CEOTIMELINESS AACC/DIST DSMR RATING A

7.35 X BK VALUEINVENTORY TO. 54.6XR&D 3.9%RET ON EQUITY 16%CASH FLOW $1.7

FUNDS 54%BANKS 1%MGMT 8%ALPHA 0.34BETA 1.66

35.80 36.15

66.02

74.7374.73

28.90 30.00 29.85

55.60

47.30

98

QTR 4QTR 3

QTR 2

QTR 1

20

30

40

50

60

70

PRICE SCALE

99COMPOSITE RATING(C)12$ -0.28 $ 3 113 0.06 11 214 0.10 11 615 0.46 16 716 0.85 24 817 0.97 39 2118 1.81 EST +87% ↑19 1.81 EST +0% ↑

EARNINGS (DEC) HI LOCatasys CATS 98 8BioScrip BIOS 97 33Invitae NVTA 97 31GuardantHl GH 95 17NeoGenomic NEO 93 91




0.32 VS 0.23 +39%91.7 VS 54.0 +70%N/A 42X -- 27X

0.39 VS 0.16 +144%94.5 VS 55.9 +69%N/A 42X -- 31X

0.46 VS 0.23 +100%101.4 VS 58.1 +74%

N/A 40X -- 28X

0.53 VS 0.24 +121%100.0 VS 81.0 +23%

N/A 47X -- 34X


R S LINE VS SP500

VOLUME

138 K

400 K

CAREDX INC(CDNA) NASDAQ 41.1 SHRS / 39.4 FLT / AVG VOL 715034 $25.14(OH -18%)MEDICAL-PRODUCTS caredx.com

DEVELOPS DIAGNOSTIC SURVEILLANCE PRODUCTS USED TO MONITOR ORGAN TRANSPLANT RECIPIENTS FOR ACUTE CELLULAR REJECTION. 11/18 RAISED 2018 REVENUES GUIDANCE TO $74 MIL TO $75 MIL.

SHORT INT 3 DAYS +0%OPTIONS ONUP/DOWN 1.2EX-DIVYIELD

GROWTH RATEEARNINGS STABEPS RANK 48PE5 YR PE 81 - 396

DEBTNEW CEOTIMELINESS AACC/DIST CSMR RATING D

-151.44 X BK VALUEINVENTORY TO. 8.8XR&D 25.6%RET ON EQUITY N/ACASH FLOW $-0.47


16.00

29.6030.8030.80

4.92 5.07 5.51

10.31

21.30

99

QTR 4QTR 3

QTR 2

QTR 1

PO

PPO

0

10

20

30

PRICE SCALE

91COMPOSITE RATING$10.00IPO 7/17/1412$ -0.48 $13 -0.3214 0.06 10 515 -1.05 8 316 -0.84 6 217 -0.69 7 018 -0.18 EST ↑19 0.16 EST ↑

EARNINGS (DEC) HI LOPro Dex In PDEX 99 65TandemDiab TNDM 99 46BovieMed APYX 99 42GenomicHlt GHDX 98 76Aethlon AEMD 98 39




-0.09 VS -0.13 N/A12.5 VS 10.9 +15%N/A N/A

-0.14 VS -0.31 N/A14.1 VS 11.6 +21%N/A N/A

-0.04 VS -0.17 N/A17.8 VS 12.1 +48%N/A N/A

-0.01 VS -0.15 N/A21.2 VS 12.2 +74%N/A N/A


R S LINE VS SP500

VOLUME

70 K

300 K

1.4 M

14


Nikkolas Rosales is the newest

member of the MarketSmith

Coaching team. A tech

troubleshooting specialist,

Nikkolas joined Investor’s

Business Daily® 3 years ago. He

began using MarketSmith for

his stock research and noticed

right away that he was finding

stronger stocks and improving his

returns. Due to his encyclopedic

knowledge of MarketSmith and

his helpful, cheery demeanor, he

was recently named a MarketSmith Product Coach.

Stock Guide: How did you first get into investing?

Nikkolas Rosales: I really wasn’t that tuned in to the stock market until I

joined IBD® about 3 years ago. Learning about the CAN SLIM® rules and

how the market works, it really opened my eyes up to new possibilities.

SG: What’s your daily investing routine like?

NR: I use MarketSmith for 95% of my stock research. I run 5 custom

screens on a daily basis that piggyback off of MarketSmith stock ideas

from three lists: RS Line New High, Near Pivot and Breaking Out Today.

SG: What’s a recent trade that taught you something valuable?

NR: I was heavy into Apple (AAPL) in Q4. I had realized a lot of gains from

Apple earlier in the year, so it was probably something of a “pet stock” for

me, looking back on it. I should have sold it earlier and taken the profits,

but I had a lot of conviction in the company. It lost a lot of value and I took

a loss on that one. I learned not to put too many eggs in one basket.

Coaches Corner: Nikkolas Rosales

15

SG: You talk to people about investing every day. What’s the one question you get asked the most?

NR: Why don’t the stocks on MarketSmith’s lists follow all the CAN SLIM®

rules? We don’t preselect stocks based on CAN SLIM® on the platform; it’s

more of an agnostic set of tools for you to do stock research. It works for

every type of investor.

SG: Legal marijuana stocks have been huge this year. What’s your take on the industry?

NR: I think greed is going to hurt the industry. As the industry grows

following the larger trend of legalization, regulators are going to tax it to

the point where it puts a huge dent in profitability across the board.

SG: There’s an old investing saying, “Invest in what you know.” Is there a stock you bought because you knew the product and believed in it?

NR: For one of my biggest winners of 2018, I knew the product from going

to the store. American consumers will lead the market in certain directions

with their buying power, so I’ll keep an eye out when I’m shopping for

products that are consistently sold out.

When I’d go to stores like Target and Walmart, I’d see a big SodaStream

(SODA) display, and their products were sold out 90% of the time. I did my

research on the company, found the fundamentals to my liking, and bought

SODA stock in Q3 coming out of a base. I rode it to the top when they got

bought out by Pepsi (PEP). It was one of my most profitable trades of the year.

SG: You don’t just invest in the market; I hear you’ve got quite a sneaker collection. If your investing style were a sneaker, what would it be?

NR: It would be the Air Jordan 1 Bred. It came out in the 80s and it’s been

consistently popular ever since. Collectors pay between $550 and $1,000 for

a pair. It’s a prime example of timeless style. That’s like my investing—I look for

stocks with big growth potential early on and apply buying and selling rules

that work in any market. I avoid fads and concentrate on good fundamentals.

16

Find newer stocks with strong CAN SLIM®

characteristi cs.

These companies sport solid fundamentals and boast current quarterly earnings of at least 20%, as well as high EPS and RS Rati ngs.

COMPANY (SYMBOL) INDUSTRY GROUP CAMP RATING PAGE

Cyberark Soft ware Ltd (CYBR) Computer Sft wr-Security 99 17

Forti net Inc (FTNT) Computer Sft wr-Security 99 17

Medpace Holdings Inc (MEDP) Medical-Research Eqp/Svc 99 18

Medical Properti es Trust (MPW) Finance-Property REIT 99 18

Servicenow Inc (NOW) Computer Sft wr-Enterprse 99 19

Nexstar Media Group Cl A (NXST) Media-Radio/TV 99 19

Visit MarketSmith.com/learn/stockguide to load the criteria for this and other Stock Guide screens directly into your MarketSmith screener.

*All screen results are computer-generated and were run on December 31, 2018. This screen can also be found on

marketsmith.com in shared screens.

High Growth Potenti al

Screen created by Nikkolas Rosales, MarketSmith Product Coach

17

MarketSmith.com // 2019 Q1Cyberark Software Ltd (CYBR)

Fortinet Inc (FTNT)

* CYBERARK SOFTWARE LTD(CYBR) NASDAQ 35.0 SHRS / 21.7 FLT / AVG VOL 628158 $74.14(OH -11%)COMPUTER SFTWR-SECURITY cyberark.com

ISRAELI PROVIDER OF NETWORK SECURITY SOFTWARE FOCUSED ON PROTECTING PRIVILEGED ACCOUNTS

11/18 RAISED 2018 NON-GAAP EARNINGS GUIDANCE TO $1.75 TO $1.77 PER DIL SHARE ON REVENUES TO $328.9 MIL TO $330.4 MIL.

SHORT INT .6 DAYS +5%OPTIONS ONUP/DOWN 1.4EX-DIVYIELD



6.91 X BK VALUEINVENTORY TO.R&D 16.2%RET ON EQUITY 13%CASH FLOW $1.27


52.90

67.6569.97

81.24

84.21

79.16

40.63 41.55

48.60

61.6059.02

65.8564.66

97

QTR 4QTR 3

QTR 2

QTR 1

30

40

50

60

70

80

PRICE SCALE

99COMPOSITE RATING$16.00IPO 9/24/1412$ 0.27 $13 0.2814 0.49 47 2215 1.00 76 3316 1.26 59 3117 1.16 55 3918 1.76 EST +52% ↑19 1.94 EST +10% ↑

EARNINGS (DEC) HI LOSecurework SCWX 99 61Okta A OKTA 98 32Imperva IMPV 97 38Zix ZIXI 95 83Rapid7 RPD 94 36




0.41 VS 0.41 0%80.4 VS 64.4 +25%N/A 42X -- 33X

0.32 VS 0.28 +14%71.8 VS 59.0 +22%N/A 46X -- 35X

0.36 VS 0.21 +71%77.7 VS 57.5 +35%N/A 57X -- 42X

0.48 VS 0.25 +92%84.7 VS 64.8 +31%N/A 60X -- 46X


R S LINE VS SP500

VOLUME

142 K

400 K

1.1 M

* FORTINET INC(FTNT) NASDAQ 170.4 SHRS / 139.7 FLT / AVG VOL 2.26MIL $70.43(OH -25%)COMPUTER SFTWR-SECURITY fortinet.com

DEVELOPS UNIFIED THREAT MANAGEMENT SYSTEMS TO PROVIDE SECURITY AND NETWORKING FUNCTIONS

11/18 EXPECTS 2018 ADJUSTED EARNINGS OF $1.72 TO $1.76 PER DILUTED SHARE ON REVENUES OF $1.785 BIL TO $1.795 BIL.

SHORT INT 3.4 DAYS +14%OPTIONS ON AM/MSUP/DOWN 0.7EX-DIVYIELD



19.53 X BK VALUEINVENTORY TO. 16.2XR&D 14.1%RET ON EQUITY 26%CASH FLOW $1.39


57.98

66.32

94.37

84.00

77.1877.18

43.48

51.9753.40

62.2764.65

92

QTR 4QTR 3

QTR 2

QTR 1

30

40

50

60

70

80

90

PRICE SCALE

99COMPOSITE RATING(W)$6.25IPO 11/18/0912$ 0.53 $ 28 1713 0.49 25 1614 0.48 31 1815 0.51 50 2816 0.73 37 2317 1.04 45 2918 1.76 EST +69% ↑19 2.01 EST +14% ↑

EARNINGS (DEC) HI LOSecurework SCWX 99 61Okta A OKTA 98 32CybArkSftw CYBR 97 98Imperva IMPV 97 38Zix ZIXI 95 83




0.32 VS 0.30 +7%416.7 VS 362.8 +15%

N/A 45X -- 36X

0.33 VS 0.17 +94%399.0 VS 340.6 +17%

N/A 53X -- 43X

0.41 VS 0.27 +52%441.3 VS 363.5 +21%

N/A 56X -- 45X

0.49 VS 0.28 +75%453.9 VS 374.2 +21%

N/A 69X -- 47X


R S LINE VS SP500

VOLUME

800 K

2.5 M

8 M

18

Medpace Holdings Inc (MEDP)

Medical Properties Trust (MPW)

MEDPACE HOLDINGS INC(MEDP) NASDAQ 35.6 SHRS / 24.9 FLT / AVG VOL 722974 $52.93(OH -18%)MEDICAL-RESEARCH EQP/SVC medpace.com

PROVIDES OUTSOURCED CLINICAL DEVELOPMENT SERVICES TO BIOTECHNOLOGY, PHARMACEUTICAL/MEDICAL DEVICE INDUSTRIES 10/18 EXPECTS 2018 ADJUSTED EARNINGS OF $2.76 TO $2.82 PER DILUTED SHARE.

SHORT INT 2.6 DAYS +32%OPTIONS ONUP/DOWN 1.4EX-DIVYIELD


DEBT 41%NEW CEOTIMELINESS AACC/DIST BSMR RATING A

3.49 X BK VALUEINVENTORY TO.R&D N/ARET ON EQUITY 11%CASH FLOW $1.72


39.63 39.29

45.94

63.9765.09 64.9464.94

31.7533.52

35.00

55.02

45.88

94

QTR 4QTR 3

QTR 2

QTR 1

PSO

SO

SO

PSO

SO

PSO

20

30

40

50

60

PRICE SCALE

99COMPOSITE RATING$23.00IPO 8/11/1612$13 1.02 $14 0.8915 0.9916 1.36 38 2617 1.51 39 2118 2.51 EST +66% ↑19 2.89 EST +15% ↑

EARNINGS (DEC) HI LOVeracyte VCYT 99 33NanoStrgTe NSTG 98 6Illumina ILMN 92 95Iqvia IQV 91 90ThermoFish TMO 89 81




0.39 VS 0.35 +11%112.7 VS 108.2 +4%

N/A 27X -- 22X

0.55 VS 0.34 +62%163.1 VS 106.6 +53%

N/A 27X -- 21X

0.61 VS 0.38 +61%170.1 VS 106.2 +60%

N/A 27X -- 20X

0.67 VS 0.40 +68%179.3 VS 110.6 +62%

N/A 33X -- 24X


R S LINE VS SP500 VOLUME

82 K

300 K

1.1 M

* MEDICAL PROPERTIES TRUST(MPW) NYSE 364.9 SHRS / 361.3 FLT / AVG VOL 3.53MIL $16.08(OH -8%)FINANCE-PROPERTY REIT medicalpropertiestrust.com

REIT THAT ACQUIRES, DEVELOPS AND NET-LEASES HEALTHCARE FACILITIES ACROSS THE U.S. 11/18 EXPECTS 2019 NORMALIZED FFO OF $1.42 TO $1.46 PER DILUTED SHARE.

SHORT INT 6.4 DAYS +6%OPTIONS ON NY/PHUP/DOWN 1.2EX-DIV 12/12YIELD 6.2%

GROWTH RATE +30%EARNINGS STAB 41EPS RANK 96PE (0.7XS&P)5 YR PE 8 - 15

DEBT 128%NEW CEOTIMELINESS AACC/DIST CSMR RATING A



13.40

14.52

15.24

17.5217.52

11.82

12.38 12.25

13.98

94

QTR 4QTR 3

QTR 2

QTR 1

12

14

16

18

PRICE SCALE

99COMPOSITE RATING12$ 0.90 $ 11 813 0.98 17 1114 1.07∆ 14 1115 1.25∆ 15 1016 1.28 15 917 1.35∆ 14 1118 1.37 EST +1% ↓19 1.43 EST +4% ↑

FFO (DEC) HI LOClipperRea CLPR 97 50InnovatvIn IIPR 96 80AmericoldR COLD 96 76OmegaHlthc OHI 95 61NexPointRe NXRT 95 19



FFO $REVENUE MI $DIVIDEND-PF

0.37 VS 0.31 +19%205.0 VS 153.3 +34%$0.24 11X -- 10X

0.36∆ VS 0.33∆ +9%205.1 VS 156.4 +31%$0.25 11X -- 9X

0.36 VS 0.32 +12%201.9 VS 166.8 +21%$0.25 10X -- 9X

0.35 VS 0.33 +6%197.0 VS 176.6 +12%$0.25 11X -- 10X

FFO DUE 2/8 QUARTER ENDED DEC 31,17 QUARTER ENDED MAR 31,18 QUARTER ENDED JUN 30,18 QUARTER ENDED SEP 30,18

R S LINE VS SP500

VOLUME

1 M

2.5 M

19

MarketSmith.com // 2019 Q1Servicenow Inc (NOW)

Nexstar Media Group Cl A (NXST)

* SERVICENOW INC(NOW) NYSE 179.3 SHRS / 175.7 FLT / AVG VOL 2.32MIL $178.05(OH -13%)COMPUTER SFTWR-ENTERPRSE servicenow.com

DEVELOPS CLOUD-BASED IT SOFTWARE FOR WORKFLOW AUTOMATION, DATA CONSOLIDATION, BUSINESS ADMINISTRATION. 10/18 EXPECTS Q4 2018 REVENUES OF $660 MIL TO $665 MIL.

SHORT INT 5 DAYS +7%OPTIONS ONUP/DOWN 1.4EX-DIVYIELD


DEBT 108%NEW CEO 4/17TIMELINESS AACC/DIST BSMR RATING A

51.91 X BK VALUEINVENTORY TO.R&D 19.5%RET ON EQUITY 47%CASH FLOW $2.45


176.56

182.59

188.59

194.81

206.29

194.04 192.16192.16

137.60

156.00 156.18

167.36

174.35

147.63 90

QTR 4QTR 3

QTR 2

QTR 1

110

120

130

140

150

160

170

180

190

200

210

220

PRICE SCALE

99COMPOSITE RATING(C)$18.00IPO 6/29/1212$ -0.14 $ 41 2213 -0.07 58 2514 -0.07 71 4415 0.40 91 6216 0.70 89 4517 1.33 131 7318 2.36 EST +77% ↑19 3.13 EST +33% ↓

EARNINGS (DEC) HI LOTwilioInc TWLO 99 76Sharpsprin SHSP 99 4RubiconPrj RUBI 98 5Everbridge EVBG 98 2Five9 FIVN 97 76




0.35 VS 0.24 +46%546.4 VS 385.7 +42%

N/A 130X -- 98X

0.56 VS 0.31 +81%589.2 VS 428.8 +37%

N/A 140X -- 109X

0.49 VS 0.22 +123%631.1 VS 448.3 +41%

N/A 139X -- 103X

0.68 VS 0.38 +79%673.1 VS 492.4 +37%

N/A 129X -- 98X


R S LINE VS SP500

VOLUME

700 K

1.4 M

* NEXSTAR MEDIA GROUP CL A(NXST) NASDAQ 45.6 SHRS / 42.4 FLT / AVG VOL 729874 $78.64(OH -12%)MEDIA-RADIO/TV nexstar.tv

OWNS AND OPERATES 170 TV STATIONS AND RELATED LOW POWER AND DIGITAL MULTICAST SIGNALS IN 100 MARKETS

12/18 TO ACQUIRE TRIBUNE MEDIA CO, A TELEVISION/DIGITAL PROPERTIES CO, FOR $46.50 PER SHARE OR $6.4 BIL IN A CASH.

SHORT INT 5.2 DAYS +3%OPTIONS ONUP/DOWN 1.1EX-DIV 11/15YIELD 1.9%


DEBT 272%NEW CEOTIMELINESS AACC/DIST ESMR RATING A



82.95

80.45

89.75

83.47 83.7584.97

89.6689.66

60.30

65.20

72.1570.09 70.51

91

QTR 4QTR 3

QTR 2

QTR 1

50

60

70

80

90

PRICE SCALE

98COMPOSITE RATING12$ 0.84∆ $ 12 613 -0.06∆ 56 1014 2.02∆ 56 3215 2.42∆ 61 4216 2.89∆ 67 3417 3.24∆ 80 5518 8.42 EST +160% ↓19 6.67 EST -21% ↓

EARNINGS (DEC) HI LOTribuneMed TRCO 95 54ScrippsEWA SSP 93 45Discovery DISCB 87 76MSG Ntwrks MSGN 86 58HmsphrMed HMTV 76 19




1.18∆ VS 0.64∆ +84%653.7 VS 309.9 +111%$0.30 30X -- 23X

1.01∆ VS 0.13∆ +677%615.3 VS 540.3 +14%$0.38 31X -- 20X

1.86∆ VS 0.91∆ +104%660.3 VS 626.1 +5%$0.38 21X -- 15X

2.12∆ VS 0.98∆ +116%693.0 VS 611.9 +13%$0.38 22X -- 15X


R S LINE VS SP500

VOLUME

300 K

700 K

1.6 M

20

At MarketSmith headquarters, our developers have been hard at work

improving the platf orm. We listened to our members and have been

incorporati ng new features as well as improving existi ng ones. One of the

most exciti ng improvements is now live: an enhanced chart markup tool.

Features Highlight: The New Markup Tool

The New Markup ToolAccess the markup tool by clicking or tapping on the wrench icon in the

upper right-hand corner of a MarketSmith chart. On the dropdown menu

that appears, select “Markup Tool” and you’ll see a markup interface box

appear on the chart. Move the box around by clicking and dragging. You

can create lines, arcs, boxes and text annotations anywhere on the chart by

clicking the corresponding icon.

21

Enhanced FeaturesThe new markup tool now includes the ability to go back and edit your

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You can note areas of support and resistance so you can easily recognize

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Post-AnalysisPost-analysis is simpler and faster when you mark your past buy and sell

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to keep an eye out for in future trades.

22

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