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I update the following portfolio/screen on a monthly basis on Scott's Investments. February's list of 40 stocks is here and the top 10 rated stocks returned an average of 3.47% for the top 10 stocks on the list versus -1.14% for SPY. The entire list of 40 stocks last month returned an average of 2.50%, led by First Cash Financial Services (FCFS) at 20.89%.
The screen looks for the following:
This strategy of screening stocks has produced solid returns since this summer. For example, August's list returned 16.17% versus 7.87% for SPY and July's top 5 stocks returned over 19%.
The rational for this screen is based on backtests showing stocks with low PEG ratios, debt, and high returns on equity and price momentum have produced good historical returns. The screen has tested well historically in bullish periods and has suffered during significant market drawdowns. Strategies an investor could use to avoid major drawdowns would be to either abandon this type of strategy entirely when the SP 500 or another major index is below a long term moving average, or hedge positions using one of the methods I profiled here.
Two possible tools an investor could use to conduct this screen on his/her own are stockscreen123 or Finviz. This screen was conducted using stockscreen123. For the full list of stocks and real-time results, please see the right hand side of Scott's Investments.
No positions
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Market News and Data brought to you by Benzinga APIsI update the following portfolio/screen on a monthly basis on Scott's Investments. February's list of 40 stocks is here and the top 10 rated stocks returned an average of 3.47% for the top 10 stocks on the list versus -1.14% for SPY. The entire list of 40 stocks last month returned an average of 2.50%, led by First Cash Financial Services (FCFS) at 20.89%.
The screen looks for the following:
- earnings growers still reasonably priced as judged by the PEG ratio
- low debt
- a history of high return on equity and investment, and
- price momentum as gauged by the percentage the stock is trading to its 250 day high.
- The stocks are then ranked based on fundamental factors as compiled by stockscreen123.
This strategy of screening stocks has produced solid returns since this summer. For example, August's list returned 16.17% versus 7.87% for SPY and July's top 5 stocks returned over 19%.
The rational for this screen is based on backtests showing stocks with low PEG ratios, debt, and high returns on equity and price momentum have produced good historical returns. The screen has tested well historically in bullish periods and has suffered during significant market drawdowns. Strategies an investor could use to avoid major drawdowns would be to either abandon this type of strategy entirely when the SP 500 or another major index is below a long term moving average, or hedge positions using one of the methods I profiled here.
Two possible tools an investor could use to conduct this screen on his/her own are stockscreen123 or Finviz. This screen was conducted using stockscreen123. For the full list of stocks and real-time results, please see the right hand side of Scott's Investments.
Ticker | Name | Trend | Rank | PEG LT | DbtTot 2 EqQ |
ASNA | Ascena Retail Group Inc | Here | 99.8 | 0.98 | 0.02 |
AIT | Applied Industrial Technologi | Here | 99.46 | 0.89 | 0 |
USPH | U.S. Physical Therapy, Inc. | Here | 99.24 | 0.97 | 0.06 |
LRCX | Lam Research Corporation | Here | 99.06 | 0.94 | 0.01 |
VSEA | Varian Semiconductor | Here | 94.11 | 0.78 | 0 |
NSP | Insperity Inc | Here | 91.92 | 0.68 | 0 |
DTV | DIRECTV | Here | 91.38 | 0.59 | 0 |
SHOO | Steven Madden, Ltd. | Here | 90.99 | 0.83 | 0 |
LECO | Lincoln Electric Holdings, In | Here | 90.51 | 0.99 | 0.09 |
AAPL | Apple Inc. | Here | 90.49 | 0.78 | 0 |
EZPW | EZCORP, Inc. | Here | 89.25 | 0.74 | 0.04 |
FCFS | First Cash Financial Services | Here | 88.94 | 0.79 | 0.01 |
CTCM | CTC Media, Inc. | Here | 88.5 | 0.21 | 0 |
AVAV | AeroVironment, Inc. | Here | 87.6 | 0.84 | 0 |
MA | MasterCard Incorporated | Here | 87.58 | 0.75 | 0 |
NTES | NetEase.com, Inc. (ADR) | Here | 86.61 | 0.66 | 0 |
ANF | Abercrombie & Fitch Co. | Here | 84.6 | 0.73 | 0.04 |
DECK | Deckers Outdoor Corporation | Here | 84.18 | 0.64 | 0 |
AIXG | Aixtron AG (ADR) | Here | 83.06 | 0.26 | 0 |
FOSL | Fossil, Inc. | Here | 83.04 | 0.84 | 0.01 |
PPDI | Pharmaceutical Product Develo | Here | 82.01 | 0.89 | 0 |
SAM | The Boston Beer Company, Inc. | Here | 80.22 | 0.92 | 0 |
IPGP | IPG Photonics Corporation | Here | 80.04 | 0.96 | 0.08 |
NVEC | NVE Corporation | Here | 79.16 | 0.8 | 0 |
BIDU | Baidu.com, Inc. (ADR) | Here | 76.44 | 0.61 | 0 |
CRR | CARBO Ceramics Inc. | Here | 75.52 | 0.98 | 0 |
GOOG | Google Inc. | Here | 74.13 | 0.77 | 0.07 |
ALGN | Align Technology, Inc. | Here | 73.09 | 0.81 | 0 |
SEIC | SEI Investments Company | Here | 71.3 | 0.98 | 0.09 |
GSOL | Global Sources Ltd. (Bermuda) | Here | 70.17 | 0.47 | 0 |
GA | Giant Interactive Group Inc ( | Here | 66.77 | 0.94 | 0 |
BWLD | Buffalo Wild Wings | Here | 63.12 | 0.85 | 0.07 |
SCSS | Select Comfort Corp. | Here | 60.98 | 0.92 | 0 |
MASI | Masimo Corporation | Here | 58.83 | 0.98 | 0 |
NSR | Neustar, Inc | Here | 56.34 | 1 | 0.02 |
ESV | ENSCO PLC | Here | 47.22 | 0.79 | 0.04 |
No positions
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