Welcome to the Beginners in Stock Trading Newsletter! Over the next several months, you’ll receive expert insights, proven strategies, and real-world examples from some of the greatest stock traders in history.
Every newsletter has 2 sections. The 1st section is devoted to learning. Each building on the previous day’s lesson in logical order. Giving you a full, free trading education in under ten minutes a day.
Missed a day? You can find all of the previous newsletters online to catch up or if you joined later.
The 2nd half of the newsletter is a briefing on 1-3 stocks in the news. Read it. Then click on the links to see the corresponding charts inside the original articles. This will accelerate your ability to read the charts.
Learning to how to trade will change your life.
If you could only focus on one factor when picking stocks, it should be earnings growth.
Why? Because all the greatest stock winners in history had explosive earnings growth before their biggest runs.
📖 William O’Neil’s Insight:
“No company can sustain a long-term stock price increase without strong and consistent earnings growth. Earnings drive stock prices.”
📊 How Earnings Growth Drives Stock Prices
🔹 What Are Earnings?
A company’s earnings (also called Net Income) represent how much profit the business makes after expenses.
💡 Key Concept:
If a company makes more money than expected, its stock price often rises.
If it misses earnings expectations, the stock often falls—even in a strong market.
🚀 The Power of High Earnings Growth
A stock’s quarterly earnings growth (EPS growth) is the #1 indicator of future price increases.
✅ The best stocks show at least 25% EPS growth per quarter.
✅ Top-performing stocks often show triple-digit growth (100%+).
📖 O’Neil’s Study on Super Stocks:
✅ Microsoft (1986): EPS grew 100%, stock soared 9,000% in 10 years.
✅ Google (2004): EPS grew 123%, stock gained 2,000% in 3 years.
✅ Apple (2004-2007): EPS surged 350%, stock exploded 1,580% before the iPhone launch.
“The market rewards companies with explosive earnings growth. If you ignore earnings, you’re gambling—not trading.”
📈 How to Analyze Earnings Reports Like a Pro
🔹 Look for These 3 Key Metrics in Every Earnings Report:
Metric | What It Tells You |
|---|---|
Earnings Per Share (EPS) Growth | Is the company growing profits fast enough? (Look for 25%+ EPS growth YoY) |
Revenue Growth | Are total sales increasing? High revenue growth supports strong EPS growth. |
Profit Margins | Higher margins = stronger pricing power (More profit per dollar of sales). |
💡 Example: NVIDIA (NVDA) in 2023:
Reported 162% YoY earnings growth—the stock exploded 300%+ in a year!
🔍 How to Find Earnings Growth Stocks Early
📌 Use These Steps to Find the Next Big Winner:
✅ Step 1: Screen for Stocks with 25%+ Quarterly Earnings Growth
Use IBD Stock Screener, Market Surge’s built in scans, TradingView, or Finviz to find stocks with strong EPS growth. MarketSurge is the premium option based on O’Neill’s original design.
✅ Step 2: Look for Consistent Growth Across Multiple Quarters
One strong quarter isn’t enough—the best stocks have sustained growth.
✅ Step 3: Check If the Stock is in a Strong Industry
Stocks tend to move in groups—if one semiconductor stock is rising, others might follow.
“Big money follows big earnings. The stocks with the most explosive earnings will be the ones that institutions rush to buy.”
📉 Red Flags: When to Avoid a Stock
🚨 Warning Signs That a Stock Might Not Be a Strong Buy:
❌ Declining earnings growth – If EPS is slowing down, demand may be weakening.
❌ Earnings "misses" – Stocks often sell off if they fail to meet Wall Street estimates.
❌ No history of strong earnings – Avoid stocks with low or inconsistent growth.
📖 Example:
Snapchat (SNAP) in 2022 reported negative earnings growth → Stock fell 70%+ in months.
🎯 Action Step
✅ Go to Yahoo Finance or TradingView.
✅ Search for a stock like Apple (AAPL), Microsoft (MSFT), or Nvidia (NVDA).
✅ Check its last 3-4 quarterly earnings reports.
✅ Does it have 25%+ EPS growth YoY? Write it down in your trading journal.
⏭️ Coming Up Next:
Tomorrow, we’ll dive into annual earnings growth—why the best stocks grow consistently for years before their biggest moves.
🚀 Stay disciplined & keep learning!
Train Your Eyes On This Pattern(of the week)
Cup with Handle
📌 Understanding stock price growth:
Look up the historical stock chart of Apple (AAPL) from 2004 to 2024. Notice how the stock’s price has risen steadily over time with some pullbacks.
Use these market tools to scan for and review stocks:
✅ MarketSmith (MarketSurge) – Premium Market Analysis and Scanner Tool
✅ Charts.com – Budget-Friendly Charting Option
✅ TradingView – Free & Subscription Stock and Crypto Charts
✅ DeepVue – MarketSurge Inspired Analysis and Scanner
👀 Seeing real-world stock patterns helps train your eye for long-term trends.
Our Sister Newsletter. Because everyone’s a Beginner in something.
News
QUEST DIAGNOSTICS DEFIES THE CHAOS! 💪
While the broader market was crashing, Quest Diagnostics (DGX) stood tall, climbing 1.3% to hit $170.06. The secret? A Texas court ruling that blocked the FDA from enforcing stricter lab test regulations. This victory not only saves Quest $10M but also keeps their growth plans on track.
With an 11% gain this year alone and a strong technical setup, this stock is showing serious resilience. But watch out—new Medicare changes could challenge its momentum.
REIT STOCKS STEALING THE SPOTLIGHT 🏠
Forget the chaos in tech—Real Estate Investment Trusts (REITs) are the quiet heroes right now. With steady gains and a 2.9% YTD rise in the Real Estate Select Sector SPDR ETF (XLRE), REITs are proving to be a safe haven during this market storm.
Top names like CareTrust, Essex Property, and Curbline Properties are flashing buy signals. Looking for income? These REITs deliver high dividends and stability. But beware—things could shift if the market finds a new uptrend.
DIVIDEND STOCKS THAT PAY YOU TO WAIT! 💵
British American Tobacco (BAT) is making serious waves with its jaw-dropping 7.2% dividend yield. Investors are loving its strong cash flow and bold move toward smokeless products like Vuse and Velo.
Even with market turbulence, BAT is holding steady and forming a bullish chart pattern. If you're looking for income while the market sorts itself out, this could be your perfect match.
Stock Spotlight
Feature Stock: Quest Diagnostics (DGX)
In a turbulent market, Quest Diagnostics stands out as a beacon of stability, demonstrating resilience despite broader market sell-offs. Recently selected as the IBD Stock of the Day, Quest's strong performance can be attributed to a favorable court ruling in Texas that overturns stringent FDA regulations on lab-developed tests. This legal win provides Quest with a boost, avoiding additional compliance costs and safeguarding its $10 million planned investment.
Key Takeaways:
Stock Performance: Quest shares rose 1.3% to $170.06, while the broader Medical-Services industry group slid 2%.
Technical Strength: Shares remain above their 50-day moving average with a Relative Strength Rating of 88, signaling robust momentum.
Financial Impact: The ruling prevents a 7-cent hit to earnings per share, but challenges loom with impending PAMA regulations, which could cut Medicare payments by $100 million.
Year-to-Date Success: Quest has gained 11% YTD, outperforming its peers and highlighting its defensive qualities in a volatile market.
Why It Matters
For investors, Quest Diagnostics showcases how external catalysts, like legal rulings, can significantly impact a stock's trajectory. It also emphasizes the importance of tracking stocks that exhibit technical strength during market corrections.
Refer a friend
5 referrals How to Make Money in Stocks Complete Investing System by O’Neill
10 referrals How to Make Money in Stocks Success Stories by O’Neill
15 referrals How to Make Money in Stocks, Getting Started by Matthew Galgani
30 referrals Trade Like a Stock Market Wizard by Mark Minervini
50 referrals Lifetime access to the upcoming video courses and 50% off live events and digital products
How to Make Money in Stocks Set
Thank you for reading. We’re all Beginners in something!
-Beginners in Stock Trading Team
This newsletter is for educational and informational purposes only. The content herein should not be considered financial advice, investment advice, trading advice, or a recommendation to buy or sell any securities or financial instruments.The strategies, opinions, and examples shared reflect the personal views and historical references from publicly available sources, including the works of William J. O’Neil, Jesse Livermore, Mark Minervini, and other professional traders.Trading in the stock market involves risk, including the risk of losing capital. Past performance is not indicative of future results. You should conduct your own due diligence and consult with a licensed financial advisor or registered investment professional before making any investment decisions.
We do not guarantee any specific outcome or profit. You are solely responsible for your own financial decisions and trading actions.