Some traders may hit a wall when they try to use a stock screener to formulate a trading strategy—it’s tough to determine which criteria their stock search should focus on. Screening securities for established metrics like moving averages or earnings ratios can provide a handful of trade ideas. But screeners typically don’t address whether or not those criteria can potentially outperform the market.
For that, we can use a predictive model like the one at FinanceBoards to gauge how certain criteria have performed in the current market environment. In this case, we can use its Model Screeners widget to measure the performance of a certain indicators.
Below is a screenshot of that widget, which shows a breakdown of the screeners that have generated the best returns over the last five days (as of the end of July). The “General Woo” refers to the entirety of the FinanceBoards predictive model, which incorporates over 400 individual factors. The number on the right refers to how heavily each sub-model is weighted in the General Woo model.
You can see by looking at this table, that in the final five days of July stocks with the best pricing valuations performed the strongest, and therefore were weighted most heavily. Pricing valuation refers to the fair value of a company to a potential acquirer and divides by that the number of shares outstanding. These stocks included
China New Borun Corp BORN, Consumer Portfolio Services, Inc. CPSS, and Manning and Napier Inc MN.
To learn more about the Buying Performance History Widgets on FinanceBoards, check out its Widget Spotlight Series.
We can also search at the top to see the individual screeners that make up each model. The pricing valuations model was mostly generated by screening for stocks via a discounted cash flow. The Graham number was also used.
The point here is to predict future performance. So according to our first picture, pricing valuations, volatility, forward ratios, and valuation ratios are the best models by which to measure a stock, based on their past five days of performance.
Using
this widget, traders can see how the screeners they use relate to previous day’s market activity. This allows you get a feel for which screeners you should be using in your research, and how correlated your portfolio will be to the broader market.
WooTrader is a sponsored partner with Benzinga. This article was written in conjunction with WooTrader, and may have been subject to their approval.
Photo credit: public domain
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
