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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
  • 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

    Ticker Name Trend Rank MktCap Industry
    LRCX Lam Research Corporation Here 99.52 5391.68 Semiconductors
    MDF Metropolitan Health Networks, Here 98.97 161.77 Healthcare Facilities
    DDMX Dynamex, Inc. Here 98.59 205.6 Air Courier
    EZPW EZCORP, Inc. Here 98.31 1063.6 Consumer Financial Services
    DECK Deckers Outdoor Corporation Here 98.29 2012.1 Footwear
    CNU Continucare Corporation Here 96.9 274.91 Healthcare Facilities
    JOSB Jos. A. Bank Clothiers, Inc. Here 96.19 1232.07 Retail (Apparel)
    TXN Texas Instruments Incorporate Here 96.07 34254.3 Semiconductors
    FCFS First Cash Financial Services Here 93.89 886.4 Retail (Specialty)
    IDCC InterDigital, Inc. Here 93.83 1316.75 Communications Equipment
    USNA USANA Health Sciences, Inc. Here 90.46 622.77 Personal & Household Prods.
    MSM MSC Industrial Direct Co., In Here 88.91 3665.49 Misc. Capital Goods
    AAPL Apple Inc. Here 88.08 281633.31 Computer Hardware
    AZO AutoZone, Inc. Here 82.16 10587.51 Retail (Specialty)
    TSM Taiwan Semiconductor Mfg. Co. Here 79.86 54911.73 Semiconductors
    SNHY Sun Hydraulics Corporation Here 77.9 525.07 Misc. Fabricated Products
    CTCM CTC Media, Inc. Here 72.52 3653.59 Broadcasting & Cable TV
    NTES NetEase.com, Inc. (ADR) Here 68.61 5099 Casinos & Gaming
    DRQ Dril-Quip, Inc. Here 68.39 2678.87 Oil Well Services & Equipment
    CPRT Copart, Inc. Here 63.99 2856.68 Retail (Specialty)
    QCOR Questcor Pharmaceuticals, Inc Here 55.42 652.16 Biotechnology & Drugs
    FSLR First Solar, Inc. Here 44.35 12452.53 Semiconductors


    Disclosure: none

    Stocks: AAPL, AZO, CNU, DDMX, DECK, DRQ, EZPW, FCFS, FSLR, IDCC, JOSB, LRCX, HUM, MSM, MNK, TXN, USNA
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