This tag collects all articles that cover stock screening — the art of finding the stocks you want using quantitative criteria.

February 13, 2018

There’s been a Market Correction, Should you be Worried?

Should you be Scared of the Dow’s 1700 point drop

On the fifth of February 2018 the Dow Jones Industrial Average saw its largest single day drop in history. This drop coming off a market sell-off at the end of January has caused many investors to call for the start of a bear market. Are these claims well founded, or just good headlines?

Firstly, dollar amounts are likely the worst way to look at market changes as they skew the data. In 1929 the Dow fell from around 300 to 230. A 70 point move means nothing in today’s market environment.…

January 16, 2018

Can’t Compare Close or EPS to a Number

A lesson on absolute prices versus relative ones

You’ve been referred to this page by something saying “You can’t (or shouldn’t) use Close > 5.00” in a stock screener. 

Imagine you are looking at a share of GoodStock (yeah, I know that’s a lame name for a fake stock!).  It goes up and up, and up!  If it follows the example of Berkshire Hathaway, it soon sports a 5 or 6 digit closing price, and people can’t buy the stock.  So, it splits, and splits again.  On the other hand, BadStock starts at $10, and soon enough it has a price less than a dollar. …

November 9, 2017

Run Backtests in the Background with Recent Backtests

Highlighting Recent Backtests

Even with advanced caching methods and multiple speed upgrades, highly complex screeners still take some time to run over the past 20 years. To combat the wait time – and allow you more freedom to analyze strategies and their underlying companies – we built the “Recent Backtest” section. This section will enable you to take screeners that may have a long runtime and send them to the background, thus, allowing you to move freely throughout the platform while you wait.

To send a screen to the recent backtest tab, you first need to run the test. While it is running, select “run in background”; once clicked, the above prompt will pop up.…

November 2, 2017

Ranking the Growth of Free Cash Flow and Finding the Leaders

Intuitively, most investors would assume that consistent growth in free cash flow within a company, would result in a high performing stock. Well today we’re going to test out that theory with the “Free Cash Flow Growth Leaders Stock Screener”. With this screener, we’re looking for:

· Large and stable companies; companies that have a market cap over a billion dollars sectioned off into their respective sectors.

· Companies that rank in the top 15% of their sectors for free cash flow growth over the last trading year as long as their FCF is greater than 0.

We plotted two extra variables, capital expenditures and sales growth.…

October 26, 2017

Investment Green Flags – Decreasing Shares Outstanding

Share Buyback Programs

A company purchasing back its shares tends to increase the stock price for a couple of reasons. First, it shows that the firm and its employees are confident in the direction the company is heading, and second, it cuts down on the shares available for investors to purchase purchasing the price up through basic supply and demand.

Below, we’ve outlined one of our green flag indicators “Decreasing Shares Outstanding” which can be found within our Green Flags Score.

Like all green flags, we want to keep this to be as simple as possible. We are building a piece of a larger score, not an entire screener.…

October 19, 2017

What is your definition of “high dividend?”

How high are “high” dividend stocks?

As the markets continue to lack volatility, a number of investors are attempting to find opportunities outside of the traditional growth stocks. This leads many of them to alternatives such as forex, options, etc. However, some investors are still attempting to find gains in the equity markets, and a number of them are doing so through looking for companies with exceptionally high dividend yields. I have a little experience in dividend investing, but not enough to give my thoughts on the matter without running a few tests.

Above we have created a simple stock screener that ranks all companies in the market based on their dividend yield and returns the top 25% of them.…

September 28, 2017

Investment Red Flags – Close < 2

Sharing a lot of characteristics with the “Ultra Low Market Cap” red flag, looking for companies with a close of less than 2 gives you a number of companies whose market cap ranges from Micro to Small. These companies tend to have extremely poor fundamentals and also have a high probability of causing negative returns in your portfolio.

For this flag, we collect all companies who have a close of less than two at the time of screening. Now, a lot of marketers sell you the idea that you can make your fortune on these low priced stocks and in some cases that are true.…

September 14, 2017

Investment Green Flags – Increasing Sales and High Asset Turnover

Revenue Growth and High Asset Turnover

 

When it comes to finding green flags, sometimes the simplest idea is the best. In the case of our flag – Revenue Growth and High Asset Turnover – we look for just that. It’s pretty self-explanatory that if a company is bringing in more money and is selling products faster than anyone else, it will likely increase in price long-term.

In this flag, we’ve kept it fairly simple by looking for the following –

  • Within the past trading year, the total revenues must be larger than they were a year ago. This must be true for all points throughout the year.
September 7, 2017

Investment Red Flags – Bad Beneish Score

How negatively does a bad Beneish score affect your portfolio?

 

With all of the recent articles regarding red and green flags, I realized I should begin writing articles on the flags within the score. One such flag, the bad Beneish score, is a key component of the red flags score.

The line item, “Bad Beneish Score” within the red flags score is calculated by using the above editor.

  • The Beneish M Score over the trailing 12 months (The most recent calculation) must be greater than 0.
  • The Beneish M Score over this past year (Two quarters behind the T12M calculation) must also be greater than 0.
August 15, 2017

Learning about Green Flags and their score

Green Flags

Now that we’ve gone over red flags, it’s time to look at the other side of the equation and learn about green flags.

In our previous article, we discussed that red flags don’t necessarily mean that an investment is going to lose money. Green Flags are the polar opposite from a red flag, but it still doesn’t guarantee anything. A company could have every green flag raised and still lose money over the time you hold it. However, green flags do indicate that a company is less likely to be a dud and increase your chances of long term success.…