OK, what is a death cross, and what do I mean by “it doesn’t work”? A death cross is a (very) vivid name for a short term moving average slipping below a longer term moving average. Technical analysts love to sell when they see death crosses, and buy when they see golden crosses.…
What is Active and Passive Investing? To figure out which of these methods fit our investing needs, we first need to understand exactly what they are. Passive investing is assuming that the general market is efficient and that picking your own companies is pointless. Investments typically come in the form of index funds. …
This how-to shows how to create a strategy in Equities Lab, and how to do some basic analysis of it. For humor value, we take the point of view of a children’s book character, named Amelia Bedelia, who has no common sense. We have all felt this way sometimes. Create A Screener A quantitative mutual fund is a screener. …
Now, this flag looks incredibly simple, but whenever you see orange text in Equities Lab, it means that there is a deeper formula to explore. Clicking on that formula we are presented with the following – Though the flag itself is simple, the underlying formula is not. Understanding and analyzing cash flow statements takes time.…
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.…
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.…
High Piotroski F-Score A recurring name throughout our software and website, the F-score has been continuously tested under many different circumstances and never ceases to amaze me. It may be simplistic, but, when used correctly, can be a very powerful tool for your portfolio. For this Green Flag we want to look at the two calculations we have in the system for the Piotroski F-Score – Yearly and Trailing 12 Months.…
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. Second, it cuts down on the shares available for investors to purchase, driving the price up through restricting supply.…
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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 self-explanatory that if a company brings in more money and sells units faster, its long-term price should increase.…
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.…
Debt, a word that consumers and college students know all too well. How do companies view debt, and how does it affect their stock price? Let’s find out by taking a look at both high-debt and low-debt companies. High Debt This screener finds companies with a debt to equity ratio ranking them in the top 25% of the market, total liabilities to assets ranking in the top 25% of the market while outperforming by 2%.…
Firing on all four Cylinders The world is run by computers. Almost every field has been automated to a degree that the workplace wouldn’t be able to really function without technology, and finance is no exception. With HFT firms and algorithms dictating how we trade, let’s take a step back and assess the fundamentals.…
Plotting the distance Having not read anything written on Seeking Alpha in some time, it was nice to see Chuck Carnevale’s articles again using strong fundamentals and taking a look at the big picture of investing rather than the short term trading that takes place today. In the specific article that I was reading I saw that he was using (insert name of program here) to plot the stock price and that company’s earnings to compare.…
Why is Large Caps Increasing when their Earnings Haven’t Changed? It would make sense if a company’s share price increased roughly in time with earnings and profits. It’s simple, logical, and based purely on the core fundamentals of the company. This logic even worked between 1995 and 2012 as shown below.…
About the book I’m about 1/3 of the way through “The Complete Turtle Trader” by Michael W Covel, and I’m enjoying myself. His narratives about the people are entertaining, though that’s not why I bought the book. It does give me color into how technical traders think, though. …
Exploration of Increasing Income Yesterday I posted an article exploring a single parameter – whether or not a year-after-year increases in net income for the past five years was an investable idea. Lo’ and behold, it was. However, it wasn’t the most appetizing investment, and, as stated in the article, shouldn’t be the sole parameter used when determining a potential investment.…
Stocks that have increasing net income over the past five years This screen is nothing special. It looks for companies whose net income has been steadily growing over the past five years, and at year 5, the net income was greater than 0. That’s it. So how does this long term momentum style strategy actually fare in the markets since the year 2000?…
Industry Analysis Every time I sit down to speak with someone about the markets they ask me one of two questions. What stock should I invest in? I’m not an investment advisor, so legally I can’t tell you. What industry is going to explode Again, I’m not an investment advisor, but the cool thing is that we can actually take a look at how every single industry has performed over the past twenty years within Equities Lab. …
What is Fama French, and does it have anything to do with fried potatoes? Eugene Fama and Kenneth French are Nobel prize winning economists who advanced, then disproved the Efficient Market Hypothesis (EMH). We’re more interested in their disproof here, as obviously if the stock market were perfectly efficient, there would be no reason for a stock screener. …