Below is a list of quality stocks trading under $15 as of July 6th. I screened for the stocks using stockscreen123.com which has an almost limitless supply of stock screen criteria as well as the ability to backtest the results of various screens. Previous results from this screen can be seen here.
The criteria to screen and test the stocks are:
- Not over-the-counter
- Price is less than $15
- Close is greater than the 200 day simple moving average
- S&P 500 EPS estimate is trending upward
- S&P 500 risk premium is above 1% (for a full explanation please see here).
The purpose of points 4 and 5 are to be out of the market when conditions are not favorable. These two criteria have worked well over the past decade to avoid bear markets. It is a similar concept to the moving average systems I track on my site and the ones written about in Faber's The Ivy Portfolio.
I then ranked the top 5 based on stockscreen123's Quality-Value-Growth-Momentum model. Backtesting this strategy, assuming 1% slippage, a $100 investment using the model grew to $520.10 vs $86 in the S&P 500 (excluding dividends for both) while being out of the market most of 2008 and part of 2009. The screen rebalanced every 4 weeks. A 3 year backtest returned $162.80 versus $67.20 in S&P 500.
|UFPT||UFP Technologies, Inc.||Here||9.05||99.96||55.58||Containers & Packaging|
|SLI||SL Industries, Inc.||Here||12||99.93||72.53||Electronic Instr. & Controls|
|TGS||Transportadora de Gas del Sur||Here||3.24||99.92||514.83||Oil & Gas Operations|
|KTCC||Key Tronic Corporation||Here||4.81||99.91||49.22||Computer Peripherals|
|DINE||Rewards Network Inc.||Here||13.51||99.9||119.1||Advertising|
Disclosure: No positions