Saturday, February 21, 2009

Stock screening and watching for now

I figure there are some stock market bargains out there - somewhere - if you can find companies who's stock price is beat down but who have solid fundamental business measures... and, of course, if you'd otherwise be in Vegas, but can't afford to get there given the economy... So I tried something fun that seemed worth sharing...

I used the Google Finance stock screener to look for companies with:
- stock down more than 50% in the past year.
- Price/Earnings ratio between 0 and 10 (well priced (?), but still positive).
- Positive 5-year Net Income growth rate - still growing earnings.
- No Debt (debt to assets ratio of zero)

It's a really fun thing to do - since you can slide each of the screeners and see the number of companies change in real-time - and you can add criteria from a pretty large pre-selected list of data points.
Here's the exact stock screen I used.

On Jan 27, that screen produced 28 companies...including some old favorites like Ann Taylor, Build-a-bear and Garmin, amongst the others.

I copied and pasted the data into a Google spreadsheet (you knew that, didn't you) - and added a few columns to see what would have happened if I bought a bit of each...
For this first test, I didn't bother trying to weight the different stocks according to anything, not even to even out the amount invested - I just went simple and theoretically bought 100 shares of each... theoretically investing around $21k... and then I added a column to pull the current stock price of each of those 28 companies.

(see the whole spreadsheet here)
Results so far? Well - since Jan 27 through Feb 20, I'd have lost around $1,400 - or 6.5% of my investment... In that same period, the Dow lost 9.9% - so, as Bill Murray says, "uh, I got that goin' for me".

I just like the process - not sure I'll actually act on any of these self-found "tips" - but I like that I can easily find stocks which fit my own dreamed up criteria and then watch them easily in a spreadsheet...

If you want your own copy of that spreadsheet, go to this page where the spreadsheet itself is fully described.

(and, of course, I'm not giving any financial advice here, and if historic results were any indication of future results, you shouldn't listen to me anyway)

3 comments:

J K said...

interesting... what would be really cool is finding another bundle of stocks to hedge against. Hedging against the Dow would have been pretty good for your picks, but I bet there's a way to find shaky stocks in the same industries as the good stocks you found. Doesn't look like Google Finance Stock Screener supports that operation yet, though.

Jonathan Rochelle said...

Hey JK, There is a way to reduce the screener to only look at one "sector" at a time, but only at a fairly coarse level (12 of them)... so in the case of AEO for example, it would have to be "Services", rather than going down into the "industry" level of "Reatail (Apparel)", which would be more useful.

That said, on the quote screen of each, scroll down a little, and you can dig into the other companies in the industry of that target company.

J K said...

Ah, extremely cool!