October 30, 2017

Green Flag: PEG Ratio Greater than Zero

Investment Green Flags: PEG > 0

Continuing with our green flag series, today we are going to be taking a look at the PEG ratio, and how well companies perform when their ratio is above 0.

Though an excellent flag, it doesn’t mean anything on its own – especially if you aren’t familiar with a PEG ratio. PEG is a ratio that was designed to look at the trade-off between the price of the stock, how much money the company is bringing in per share, and the annual eps growth.

We’ve taken it a bit further in our calculation and looked for the average annual EPS growth over the past five years.…

July 16, 2017

Semiconductors, where they’re going and where they’ve been

The semiconductor industry is an important one, in fact, if it weren’t for semiconductors then you wouldn’t even be able to read this. So what exactly is a semiconductor, and why should you care about them? A semiconductor, in a nutshell, is a materials product usually made of silicon, which conducts electricity more than an insulator but less than a pure conductor, such as aluminum or copper. Semiconductors are usually very small complex devices, and the industry is driven by who can become smallest and more complex at the fastest rate. Modern day semiconductors are very small and can be found in just about every electronic device you use from your smartphone to your washing machine.…

June 17, 2017

Monte Carlo Simulation – Advanced Investing

Monte Carlo Simulation

As investors, we all know that each investment we make comes with a certain amount of risk. We can decrease this risk by understanding all possible outcomes. Better yet, we can visualize each outcome through the use of a Monte Carlo Simulation. In a broad stroke definition – a Monte Carlo simulation allows for people to make informed quantitative decisions based on a range of possible outcomes.

What does this mean?

First, we build a model we want to test. In the case below, that model would be the Screener of which we want to plug in different values for the Value Score.…

June 9, 2017

Benjamin Graham Score

In my years of using Equities Lab as a quantitative investment tool, I have never lost sight of the core values of long term investing. Many of these values are in the teachings of Benjamin Graham and used by an idol of mine, Warren Buffett. Remembering this, no matter how much risk I take on in my portfolio, I always keep a subsection for value investments. Now, his teachings are comprehensive, and there are more value factors than any one person wants to write in each of their strategies; and because of this we have created our own Graham Score which looks for ten different factors based entirely on the teachings of Benjamin Graham.…

May 27, 2017

Institutional Ownership

  Institutional ownership is something that is often associated with hedge funds, mutual funds, and pension funds. So what is it exactly? Well, simply put institutional ownership is the ownership stake in a company that is held by large financial organizations. Institutions generally acquire large chunks of a company’s outstanding shares and can apply considerable influence on its management. In this article, we will take a look at the performance of companies with large institutional ownership against the performance of companies with low institutional ownership, and also the performance of a particular hedge fund and their institutional ownership in a company.  

  Let’s start with the large institutional ownership.…

March 22, 2017

What is the Piotroski F-Score?

Piotroski F-Score

We mention the Piotroski F-Score in a lot of our articles, videos, and even within a lot of our prebuilt screens. So, it poses the question, what exactly is the Piotroski F-Score?

Created by a professor of Accounting at the University of Chicago named Joseph Piotroski, the score is used to identify possible investments.

 

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Here is the score built within the Equities Lab system using the Equihack language. For each line item that is deemed true a point is added to the score. For every line item that is not true, nothing is added to the score. The score itself is broken up into three different parts –

· Profitability – though not outlined in the editor, this contains the first four items of the score.…

February 2, 2017

Protecting Your Portfolio in a Possible Recession

Recession Protection

As people become more jumpy when it comes to the market, I decided to take it upon myself to build a screen that we could use in order to protect ourselves in the event that we do enter another recessionary period. Now, I want it to be known that I don’t necessarily believe that another recession is imminent; rather, I just like being prepared for any situation.

Sadly, there are only two recessions over the past 20 years, so we don’t have a ton of data to work with which results in a lot of guesswork and relying on fundamental factors to find companies that are secure rather than trading via speculation.…

January 8, 2017

Investable Stocks

The Stocks you pay for

The other day I wrote an article discussing my distaste for penny stocks and for how they are marketed as “the next big thing”, ruining thousands of people’s financial lives. Well, if you can’t invest in penny stocks, what can you invest in? How about we invest in stocks that, at an extremely basic level, are actually worth something?

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Here is a list of companies that I would deem “investable stocks” Each of these companies is based on a simplistic screen that simply looks for a company that has a moderately high share price, growing net income, growing sales, a moderately high Piotroski score, and a moderately low P/E.…

January 6, 2017

My Equities Lab Experience

So you’ve just downloaded the Equities Lab software and you launch it, eager to start screening stocks. If your experience is anything like mine, then you’re probably intimidated and a bit overwhelmed by all the available options and the Equihack language. You spend about 10 minutes playing around with the software trying to find all the secrets and tricks to best help you find what you’re looking for in the market. While it does at first seem intimidating, after watching the four quick start YouTube videos provided on the welcome page, I was quickly able to get a working understanding of the software and all the insight it had to offer.…

September 7, 2016

Really Low P/E Values Are Harmful

How Low Is Too Low?