A Great Stock Often Has A Terrific Peer Or Two.(A)(INVESTOR'S CORNER)

Byline: DAVID SAITO-CHUNG

It takes two to tango. Birds of a feather flock together. Two heads are better than one.

Wise sayings or cliches, these phrases deserve space in your memory file as you search for a winning stock. If you unearth a good prospect, hunt a little more. See if you can find another solid stock in the same industry.

Like a great comedy couple, a big winner in the market tends to have a partner that's in the same industry, thriving and running off to new highs as well.

According to "How to Make Money in Stocks" by IBD founder William O'Neil, research has shown that nearly half of a stock's price movement is tied to the performance of its specific industry group and the overall sector. For that reason, IBD assigns each stock within its database to one of 197 industry groups. The groups are ranked every day from first to 197th in terms of six-month price progress. In a bull market, the 40 highest-ranking groups tend to supply the best stocks.

If a company boasts outstanding increases in sales and earnings and bulging profit margins, chances are high that the industry is growing too. Another company or two may also be getting a large piece of the revenue pie. Or they may have a ...