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Exploring A Stock's Group Can Yield Nice Surprises

Make Money With IBD Stock Checkup: Second In A Series Spotting a group's leaders is a great way to hit the winners and avoid the laggards. And checking to make sure your stock is a leader can lead to pleasant surprises.

IBD's Stock Checkup can help you. This interactive feature at Investors.com will list a group's leaders by a number of crucial criteria, giving you a sort of 3D vision of that group.

Start at Investors.com's home page, and plug in a stock symbol in the "Get Quote" box. Let's put in AMSG, for AmSurg (AMSG), an operator of 228 ambulatory surgery centers across the country.

The outpatient-home care group ranks seventh out of the 197 industries tracked by IBD, as of Wednesday, and the group has climbed quickly. So you can expect that this group's top stocks should be taken seriously.

The IBD Checkup for AmSurg appears, and you'll see the doctor pointing at the stock's Composite Rating — in this case, it's a very strong 98. You know that puts AmSurg practically at the top of the group by that gauge.

But you want to make sure.

And now, at closer glance, you notice that while AmSurg leads in Composite Rating and by Accumulation-Distribution Rating, it's not on top by other gauges.

It ranks sixth by EPS Rating, with just an 89. That puts it higher than 72% or its groupmates by that gauge.

It's also ranked just seventh by SMR Rating. That puts AmSurg in the top 66% of the group.

Is that good enough

Now you want to scrutinize. Is AmSurg really the best name in this group? If not, what is

Roll your mouse over the EPS Rating bar. The Group Leaders on the right now shows the top five names. You already know AmSurg isn't one of them.

But DaVita (DVA) is. Plug that ticker into the "Rate A Stock" box, and you'll see the nationwide chain of 1,809 outpatient dialysis centers also earns a 99 Composite. What's more, its EPS and RS ranks are 97 and 90, respectively.

By EPS Rating, DaVita is the group's star, none better. By RS Rating, it ranks third.

By Accumulation-Distribution Rating (a pretty good B-), DaVita comes in eighth. And the Acc-Dis Rating for AmSurg has slipped from a top-notch A+ to a B.

As you continue parsing the group, a few truths will hit you. AmSurg appears in the group's top five by Composite, RS and Acc-Dis Ratings. DaVita pops up by four of the five criteria, but misses on just Accumulation.

AmSurg trades just 144,000 shares on an average day. Its Acc-Dis Rating may be easily skewed by a single buyer in a thin market. DaVita's volume, at more than a million shares per day, would be tougher to push around either way.