As discussed in Chapter 2 of The Disciplined Investor, stock screens can be used effectively to help search for stocks that can help to provide downside protection while positioning a portfolio for the upturn if /when markets stabilize. The fact is that the key in this environment is to look for large cap stocks paying dividends with:
- Low Debt
- PEG Ratio below 1
- Stable outlook
- High Rating
Stock Screener ” MSN MONEY
Market Capitalization >= 1,000,000,000
Debt to Equity Ratio <= 1
PEG Ratio Below 1
StockScouter rating >= 9
Current Dividend Yield >= 2
Price/Book Value <= 2
Market Capitalization: The value of a company’s outstanding shares, as measured by shares times current price.
Debt/Equity Ratio: The most recent quarter long-term debt divided by the most recent quarter common stock equity.
PEG Ratio: The price-earnings (P/E) ratio for this company has been less than its average next year’s projected earnings growth rate. For small and mid-cap stocks in particular, this is generally considered as a sign that a company may be undervalued.
StockScouter Rating: represents a balance, or trade-off, between a stock’s expected return in six months and its expected volatility en route. Expected return is derived from a weighted blend of a company’s underlying factor scores plus its place in market capitalization, sector and investment style trends. Top-rated stocks are expected to gain the most in the future with relatively less volatility.
Dividend Yield: A stock’s dividend expressed as a percentage of the share price
Price/Book Value: The latest closing price of the stock divided by the most recent quarter’s book value per share.
Results (click to enlarge)
(ACAS) (CNL) (PTEN) (TRV) (WPC) (AHL) (ATN) (CCU) (CINF) (DOW) (IP) (IPCR) (PHG) (PL) (PRE) (SLF) (STD) (UTR)
Disclosure: Horowitz & Company clients may own positions in some or all of the stocks mentioned as of the date of publish.