Buy shares low, hold them and sell high. That's a very easy and simple strategy but investing is much more than buying stocks and waiting until the price goes up. You have to select the best stocks by fundamentals, business model, market strength, price ratios and so on. Investing is hard work and your emotions shouldn't be a part of your selection process. Do you lose money with a trade? Don't care that's part of the business of a stock trader. Take care that your single trade positions are not big in relation to your trading limits or margins. They should account for less than 1 percent of your net worth.
Today, I like to screen the financial sector by the best growth stock picks for 2013. The whole sector has too many stocks listed, around 2,868 - No wonder that we need a consolidation with the financial crisis. Stocks from the sector are totally valuated at 168.25 trillion. The average P/E amounts to 13.04 and the yield is 2.45.
These are my criteria:
- Forward P/E under 15
- Past 5Y Sales growth over 10 percent
- Earnings per share growth for the next five years over 10 percent
- Operating Margin over 10 percent
- Market Capitalization over 2 billion
Eleven stocks remain of which six have a current buy or better rating. Ten of the results pay dividends. I am not a big fan of financial stocks because I could not evaluate the risks of the banking assets. I like stocks from services stocks with financial relations like Thomson Reuters, Moody's or Nasdaq.
Here is the full table with some fundamentals:
Take a closer look at the full list. The average P/E ratio amounts to 13.34 and forward P/E ratio is 11.53. The dividend yield has a value of 2.78 percent. Price to book ratio is 2.53 and price to sales ratio 2.82. The operating margin amounts to 32.65 percent and the beta ratio is 1.29. The average stock from the screening results has a debt to equity ratio of 2.18.
Related stock ticker symbols:
SAN, FNFG, WDR, BLK, CG, NDAQ, JEF, BAP, DFS, BBD, ASPS