|Symbol||Mkt Cap||P/E||Yield||P/B||Int Cov||E Marg|
Google has a better stock screener than most websites I see, including what’s available through Scottrade. The NCAV screen at grahaminvestor.com is also useful.
I ran a stock screen with the following criteria:
- Mkt Cap: 10M+. Logic being that I want reasonably sized stuff.
- P/E Ratio: <15. Cheap scaled price. Stay away from the high fliers.
- P/B: <2. Cheap scaled price.
- Div Yield: >2%. Cash back to investors.
- 52 Week Price Change: <+20%. Trading at a reasonable discount.
- Int Cov: >5. We sit at a reasonable point in the cap structure.
- Inst Hold: <50%. Relatively ignored.
I then cut out companies for various reasons:
- ETFs and open-ended mutual funds.
- financial statements might be difficult to understand/believe, i.e. Everest Re. I avoided many financial companies and Chinese companies.
- industries that I didn’t feel were promising, i.e. Earthlink.
- absurdly small.
- highly cyclical industry whose E has simply been buoyed by a 2010 bounce, i.e. PRGN and whose P is down because 2011 will clearly be bad.
- random: I have TRV in there and cut out ALL.
To elaborate on the main idea:
- Low P/E on top of stable earnings. I’m getting a lot of earnings, and stable ones, for the price I’m paying.
- Good divs so that I can see some of those earnings in cash.
- Time to wait, because int exps are so covered and P/B is very good.
- Some interesting industries: nat gas, restaurants, telecom, a REIT, defense, scientific products, food… very defensive overall I would say.
My primary fear is something I tried to avoid – an E which has been buoyed by a 2010 bounced and P has been depressed because the future is known. Ideally, by picking lesser-covered companies, I have reason to think that P has been depressed because they’re lesser-covered and not because future prospects are really that bleak.