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First quarter down and three to go.

Here are the Q1 2013 performances for the value stock screens. Follow the link to get an overview of each screen.

To see how the markets and the rest of the world has been doing, this is a short excerpt on the world market performance that I took from Adrian Day's Q1 letter (pdf). (Adrian Day is a fund manager in the resource sector that I follow)

The U.S. stock market rose by just over 10% for the quarter, while the world outside the U.S. was up just a tad over 2%. Most of Europe was down (though the markets outside of the Eurozone-including Britain, and especially Sweden and Switzerland, were up), while Asia was mixed, with Japan and Australia up strongly, but China, Hong Kong, India and many other markets down. Emerging markets in general fell around 4%, but the performance was very mixed, with some smaller Asian markets (Thailand, Indonesia) up strongly. Interestingly, it is defensive stocks that have generally performed best in the recent market rally, the opposite of what one might expect at the early stages of a long run.

That's it for the macro side. Back to the screens.

How the Screens are Set Up

  • Each screen consists of 20 stocks

  • Slippage ranges from 1% for screens with mostly large caps to 3% for small cap screens

  • Carry cost is 1.5%

  • Long weight is 100%

  • Rebalancing only once a year

These settings make a huge difference between the screen performances I put up with what you see on other sites. The above settings make it much more realistic when it comes to trading or following the screens. Four of the screens are in the 10% range after fees and two screens have lost money so far, which is not bad. But remember, even though everyone is making money except you, it is ok.

Stocks from the Top Two Screens

In the following section, I've provided the stocks that make up the top two screens. Twenty stocks for each, so 40 stocks to go through quickly or keep an eye on.

The 2013 NNWC Increasing Screen Stocks

This screen displays companies with positive and increasing Net Net Working Capital (NWC) compared to the previous quarter. Such companies have been able to increase cash, accounts receivables and/or inventory at a much higher rate than debt.

NNWC = Cash & Equivalents + (Accounts Receivables x 0.75) + (Inventory x 0.5) - Total Liabilities

(click to enlarge)

The 2013 Low Expectations Screen Stocks

A screen for companies where PE is between 7 and 8.5.

Benjamin Graham said that 8.5 is the PE of a stock with zero growth. If a company is being priced for zero growth, the downside is protected as the market has given up on the company. Conversely, any upside the company displays will surprise the market and shoot it up.

(click to enlarge)

Source: Q1 2013 Value Stock Screen Performance Summary