2023 TASI Stock Top Rankings, Are They on Your 2024 Watchlist?

EIC +1.14%
ASTRA INDUSTRIAL +0.23%
RIYADH CABLES +0.21%
MESC +5.52%
ALBABTAIN +0.60%

EIC

1303.SA

4.45

+1.14%

ASTRA INDUSTRIAL

1212.SA

176.20

+0.23%

RIYADH CABLES

4142.SA

97.50

+0.21%

MESC

2370.SA

32.50

+5.52%

ALBABTAIN

2320.SA

42.20

+0.60%

Please note that the stocks referenced in this article are provided solely for informational and discussion purposes. They are not intended to be construed as investment recommendations or advice.

The stock market offers myriad investment approaches, from short-term speculation to long-term value investment. Legends like Warren Buffett, renowned for his value investing, emphasize long-term investments in excellent companies at reasonable prices. 

Jesse Livermore, known for his speculative genius, contributed principles such as trend trading and market timing in his classics, "Reminiscences of a Stock Operator" and "How to Trade in Stocks."

However, a more comprehensive and practical approach was introduced by William O'Neil, who detailed stock selection techniques, entry and exit points, and strategies for individual investors in his work, "How to Make Money in Stocks." 

O'Neil's CAN SLIM strategy, which combines both fundamental and technical analysis, has significantly influenced the investment world.

Source from: William O'Neil + Company

Drawing from O'Neil's strategies, this article aims to apply his Relative Price Strength Rating to analyze and compare the performance of stocks in Saudi Arabia's TASI index throughout 2023. 

This method helps in identifying standout stocks and sectors over the past year, providing a clear picture of market trends.

The table below displays stocks with high Relative Price Strength Ratings over the past 12 months. 

These ratings are calculated based on the performance of each stock over the past 3, 6, 9, and 12 months, with more recent performance assigned greater weight. The ratings are then compared against the performance of all other stocks in the TASI index and reflected as Scores.

A score of 99 signifies that the stock is among the top 1% of strong performers in the TASI index, while a score of 80 indicates it is in the top 20%.

It's important to note that the 'Suspended' stocks are not included in this calculation. Similarly, stocks lacking sufficient historical data are also excluded from this ranking.

Trade Data last sourced from the market close on Thursday, Dec 28; Price charts showed Year-To-Date price movements, sourced from Yahoo Finance & Factset.

Be aware that stocks with lower market capitalizations may exhibit higher volatility, and investors should be cautious of the risks associated with excessive exposure to their positions. 

Additionally, a higher RS rating does not necessarily imply an immediate buy. For instance, if the broader market is at a peak, an RS rating over 90 might indicate that these stocks are in an overextended state, investors are advised to exercise due diligence before making investment decisions at all times.

Understanding the top-performing industry sectors is equally crucial, as sectors demonstrating strength are more likely to yield or generate strong-performing stocks. 

Therefore, the stocks in the table above also cross-references with the top 25% of strong-performing industries in all 21 industry groups of the TASI over the past 12 months. This means that other stocks not belonging to the top 25% of strong-performing industries are not listed in the table above, even though their RS Rating scores might as well be over 80.

Additionally, a specific ranking of these top 25% performing sectors is provided below, utilizing the same methodology to calculate their Relative Strength Ratings and compare them with each other:

Data last sourced from the market close on Thursday, Dec 28.

By examining the leading stocks in top-performing industries using the Relative Price Strength Rating, we can gain valuable insights into the TASI index's performance in 2023. 

This analysis not only reflects individual stock strengths but also highlights sector-wise excellence, offering a comprehensive view of the past year's market dynamics.

According to O'Neil's investment philosophy and data from Investor's Business Daily, from the 1950s to 2008, the best-performing stocks had an average Relative Strength Rating of 87 before their most significant surges. The principle that the strong get stronger and the weak get weaker is an enduring truth in the stock market. Stocks that rebound and reach new highs first after a market downturn are almost certainly the market leaders.

Stocks in a trend tend to continue developing along that trend. Respect the market, as there is no holy grail in stock investment. It's a game of probabilities, meticulous preparation can improve success rates, but it never guarantees outcomes. 

Therefore, strong sectors combined with strong stocks also increase the likelihood that these stocks will continue to develop along the trend after experiencing pullbacks and consolidations. We eagerly anticipate observing their performance into 2024.

 

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