Investor Education: Industry Group Page Makes Quick Work Of Sorting Top Sectors

One searching strategy is to identify rising industry groups and sift through them for star players.

One of the best tools for finding industries on the rise -- and the leaders in each -- is the Industry Groups tool at investors.com.

It provides the industry group data found in IBD, plus exclusive items such as charts of each group and industry movements updated throughout the day.

Daily Graphs Industry Groups is a premium product. Pricing varies depending on which research package you purchase, or if you buy Industry Groups as a stand-alone.

How It Works

To get started, zero in on the Best Performing Industries box at the top of the page. This shows industries on the move today, measured by the percentage change in the stock prices of all the companies in the group.

Why does that matter? Because studies show almost half of a stock's advance can be attributed to strength in its industry group and its broader sector.

Next, look at the group ranking columns. Look for groups moving up through the pack. In the example below, Metal Ores-Gold-Silver and Medical-Genetics are gaining serious ground over the past few months. That means a significant amount of money has moved into the sector in the past three months and, according to the day's price action, may still be on the move.

Market leaders tend to come from the first 40 or 50 groups.

Want to find stocks ready to make moves? Go to each of those specific groups and scan the list for those with high IBD ratings. Study the charts for each.

The opposite holds true for the Worst Performing Industries box.

If you own a stock in one of the groups showing up on this page, and the group shows significant weakening over the past three months, it may be time to plot an exit strategy.

Container makers and specialty alloy producers appear to be weakening in the Worst Performers' list shown here. Notice these groups' rankings have slipped over the past three months, and both are in the bottom 100 of 197 group rankings.

Tips And Tricks

Be sure to look at the Number Of Stocks In Group column. Industry groups with few stocks often are volatile. Also, small industries can be little more than a proxy for the biggest stock in it. One company jumping up or down can put them on the best or worst groups list.

Groups with many stocks but comparatively low market value can be influenced by one or two leaders. It also may mean the group is populated with low-priced stocks that are less likely to emerge as leaders.

The left-hand column of the IBD Industry Groups page shows links to the Highest and Lowest Rankings pages.

Look through the Highest Rankings list to find top industry groups. You can sort through those groups, especially those showing a steady acceleration from three months ago to four weeks ago to the current week.

This page also shows the percentage of stocks in the group making new highs. Check to see if those new highs are on strong volume. If so, it can be a solid indicator that the group has room to run.

For each industry, you can click on the column heading -- EPS Rating, RS Rating, volume percentage change -- to sort the entire list according to that element.