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I am an independent investor writing at Scott's Investments (http://www.scottsinvestments.com). My site is dedicated to discussing and publicly tracking historically successful investments strategies and sharing free investment resources. I emphasize empirical, historical, and quantitative... More
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Scott's Investments / Stock Loon LLC
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Scott's Investments
  • 22 Top Stocks Based on PEG and Price Momentum 0 comments
    Oct 26, 2010 9:58 AM | about stocks: AAPL, AZO, CNU, DDMX, DECK, DRQ, EZPW, FCFS, FSLR, IDCC, JOSB, LRCX, HUM, MSM, MNK, TXN, USNA
     Trade stocks for free through Zecco.com, the Free Trading Community. www.zecco.com

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    I conduct the following screen on a monthly basis. Early out-of-sample results have been mixed, performing well during bullish environments and poorly during bearish/choppy markets.  Last month's list is here and returned an average of 4.91% for the 10 stocks on the list versus 3.34% for SPY.  The top 5 stocks on the list returned 7.21%.
    August's list here, July's list is here, June's list is here, May's list is here, Aprils' list is here, March's list is here, February's list is here and January's here. The screen looks for the following:
      • earnings growers still reasonably priced as judged by the PEG ratio
      • low debt
      • a history of high return on equity and investment, and
      • price momentum as gauged by the percentage the stock is trading to its 250 day high.
    August's list returned a whopping 16.17% versus 7.87% for SPY.  It is worth noting that list had very few stocks that qualified for the list, three in total. 

    When the screen results in more than 5-10 stocks I have also started tracking returns of the top  5 or 10 stocks at the beginning of each list (when more than 5 stocks qualify).  The top stocks are selected based on fundamental factors.   For the full list of stocks and results, please see the right hand side of Scott's Investments.

    The screen has tested well historically in bullish periods so strategies an investor could use to avoid drawdowns would be to either a) abandon this type of strategy entirely when the S&P 500 or another major index is below a long term moving average, or b) hedge positions with a position in SH or write a short option strategy on an equity index or ETF like SPY.
    This month's list contains 22 stocks versus 12 last month.  Two possible tools an investor could use to conduct this screen on his/her own are stockscreen123 or Finviz. This screen was conducted using stockscreen123.
     
     
     
    No positions in stocks mentioned

    TickerNameTrendRankMktCapIndustry
    LRCXLam Research CorporationHere99.525391.68Semiconductors
    MDFMetropolitan Health Networks,Here98.97161.77Healthcare Facilities
    DDMXDynamex, Inc.Here98.59205.6Air Courier
    EZPWEZCORP, Inc.Here98.311063.6Consumer Financial Services
    DECKDeckers Outdoor CorporationHere98.292012.1Footwear
    CNUContinucare CorporationHere96.9274.91Healthcare Facilities
    JOSBJos. A. Bank Clothiers, Inc.Here96.191232.07Retail (Apparel)
    TXNTexas Instruments IncorporateHere96.0734254.3Semiconductors
    FCFSFirst Cash Financial ServicesHere93.89886.4Retail (Specialty)
    IDCCInterDigital, Inc.Here93.831316.75Communications Equipment
    USNAUSANA Health Sciences, Inc.Here90.46622.77Personal & Household Prods.
    MSMMSC Industrial Direct Co., InHere88.913665.49Misc. Capital Goods
    AAPLApple Inc.Here88.08281633.31Computer Hardware
    AZOAutoZone, Inc.Here82.1610587.51Retail (Specialty)
    TSMTaiwan Semiconductor Mfg. Co.Here79.8654911.73Semiconductors
    SNHYSun Hydraulics CorporationHere77.9525.07Misc. Fabricated Products
    CTCMCTC Media, Inc.Here72.523653.59Broadcasting & Cable TV
    NTESNetEase.com, Inc. (ADR)Here68.615099Casinos & Gaming
    DRQDril-Quip, Inc.Here68.392678.87Oil Well Services & Equipment
    CPRTCopart, Inc.Here63.992856.68Retail (Specialty)
    QCORQuestcor Pharmaceuticals, IncHere55.42652.16Biotechnology & Drugs
    FSLRFirst Solar, Inc.Here44.3512452.53Semiconductors


    Disclosure: none
    Stocks: AAPL, AZO, CNU, DDMX, DECK, DRQ, EZPW, FCFS, FSLR, IDCC, JOSB, LRCX, HUM, MSM, MNK, TXN, USNA
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