Suffering losses when the market tumbles is bad enough. Adding to the irritation are commentators who whoop with joy about how bear markets afford great opportunities to buy good stocks at bargain prices. Frankly, I'd rather pay full price for what I buy and enjoy a much higher brokerage balance. So I'm not going to wax poetic about how much I love these buying opportunities. But . . . that won't stop me from take advantage of them while they're here.
Fri Dec 19, 2008
By Marc Gerstein
Screens for bargain hunters
Here are some stock screens created to identify potential bargains in the current down market. All are available as P123 screens.
In all cases, the fundamental factors were run against a universe defined as follows:
Since these are public screens, those factors are expressed as screening rules, rather than a custom universe. The first three rules are standard for me. The no-finance rule is geared for our current situation. I believe it is presently impossible to many finance stocks. To tackle that task, I'd want to have expertise in political science, since developments in that area are likely to trump anything we can glean from financial statements. As to the no-ADR rule, I'm on the fence. I put it in mainly as a comfort factor; to stick with more familiar U.S. stocks. Actually, though, I can't objectively say my quest for comfort will enhance probabilities of success. Before actually investing money, I expect to take a look at what shows up if I disable the no-ADR rules.
All of these screens will be discussed individually in subsequent blogs. But if you click on the links above, you can get access to all of them immediately.
Caveats and context
Before jumping head first into any of these screens, there are some important issues that need to be addressed.
HistQ1EPSActual+HistQ2EPSActual+ HistQ3EPSActual+ HistQ4EPSActual >0
SalesTTM- COGSTTM- IntExpTTM- DepSCFTTM>0
Sales - cost of goods sold - interest expense - depreciation
(3,493 passing companies)
cash from operations - capital spending
(4,531 passing companies)
OK. Enough with the context. As noted, subsequent blogs will look at the screens individually, but if you want to get started right away, the screens can be accessed by clicking on the above links or through the P123 screens section. Note, too, that all of these screens are fairly simple, so it should be easy for you to come up with your own wrinkles. (Also, you could incorporate the first five lines into a custom universe, which is what I'd have done had I kept the screens private).
Book-Value Bargains »