|
The single best way to get investment ideas - Guest Post |
| Print | |
|
What's the best way for to
find investment ideas?
This article is a guest post by Zack
Miller (who writes the New Rules of Investing blog) that helps you do
exactly that.
It is about stock screeners which, for those perhaps not
familiar with the term, are programs or web pages that lets you search
for companies whose stock prices fit certain criteria.
For example, a price to
earnings ratio of less than 10 and debt to equity of less than 35%. The
screener will then give you a list of companies that fit within the
search criteria you specified.
Screeners are really helpful tools but they are just that, tools. They
also make mistakes, which means they are just a starting point in your
search for good investment ideas.
I use screeners extensively to find investment ideas. But as mentioned
it is just a start, from there I do an in depth analysis of the companies
identified in the screen.
The screeners Zack mentions are really useful for the do-it-yourself
investor and are great resources for finding investment ideas to
research further.
The Web’s Best Stock
Screens: Looking for the next winning
investment
Stock screens allow
investors to sort through lots of
different stocks in search for only the ones that fit certain
criteria. Investors looking for the next stock pick for their
portfolios can use basic screening tools, available at both Yahoo!
Finance and Google
Finance.
MSN
recently
retired its highly-regarded stock screening tools,
leaving what’s freely available somewhat lacking.
Screening
2.0, something I
like to discuss on the site, provides the same outcomes but
incorporates more algorithmic know-how, some artificial intelligence
(how do you deal with an infinite P/E one year?), better ability to
backtest results, and preset criteria to match results of the world’s
best investors.
I decided to piece together a list of
some of the
Internet’s best free and premium stock screening resources.
So, here goes:
General Investing
-
Validea:
One of my favorites and started by author of The Guru Investor, John
Reese. Validea is a premium service that tracks screens
preconfigured with the investing criteria of history’s greatest
investors, like Buffett, Graham, Peter Lynch, Ken Fisher, and more.
-
Finviz:
Lots of stuff going on here. IMO, the most powerful, free screener
available. With fewer preset screens, Finviz is for more advanced
investors who have specific criteria they look for in stocks. A
whole lotta descriptive, fundamental, and technical ways to sort for
new ideas.
-
Manual
of Ideas: Mentioned in my post from last week, Top
6
Ideas for Piggyback Investing, MOI has both free and premium
screens like 10×45 Bargain Hunter, European Value Report, Equities
and Tobin’s Q. These screens come in form of subscription
newsletters (again, some free, some premium) with more analysis
included beyond the output of the stock screens.
-
AAII
Screens: Blown away by how many screens the American Association
of Individual Investors has on its website (you have to join AAII to
access these screens). You can find growth and value screens with
preset parameters (like IBD Stable 70 and CAN SLIM) as well as guru
screens that look for specific investment criteria established by
famed investors like Graham, Buffett, Dreman, Lynch, Zweig, etc.
Value Investing
Institutional Ownership
-
AlphaClone:
Of
course, this hedge fund slicer-and-dicer is a stock screen of sorts.
This premium product (read my review here)
allows users to identify the top performing funds, peer into their
holdings and backtest their strategies.
Insider Buying/ Selling
Technicals
-
StockFetcher:
Nice
premium screen for technical investors encompassing Bollingers,
Candlesticks, Moving Averages, and more. Output is downloadable to
Excel.
As mentioned in this article Most
underrated investor resource on the internet,
I really like the Financial Times stock screener as it has more
international coverage and is also really easy to use. And best of all
its available for free you just have to register (also free) on the
Financial Times website.
Have you signed up for my free weekly newsletter "Investing that makes sense" yet?
Sign up now and receive
articles like this in your inbox weekly.
And if you sign up now you will also receive a
10 page free bonus report - Enhanced Checklist for Value Investors - with over
30 proven checklist items to improve your investment returns.
I respect your privacy - Privacy
Policy
Prosperous investing
Tim du Toit
PS
Screeners are great tools you can use to find investment ideas.
However, should you not have the time to screen and research
investment ideas, take a look at my subscription service.
All the research is done for you all you have to do is read, decide and
follow the clear buy or sell instructions.
Get
more information here
P.S. A media company in the wrong country at the wrong time...
This month the company I found for subscribers is located in France.
In terms of the size of companies I look at its quite large with a market value of €1,72 billion.
The company owns the most popular television channel in one of the largest European countries but is also very active in new media channels including the internet, tablets and smart phones.
In spite of this, the market views it as an old media company that is soon going the way of the dinosaurs. However, when you look at its financial statements you will see what a great business it is.
Its balance sheet is solid with no debt, and it generates a high amount of free cash flow and profits. This enables it to pay a dividend of just under 7% that can easily be maintained and has room to increase.
When I recommended the company it was trading at 7 times free cash flow, 7,7 times 2010 earnings and 5,6 times EBIT to enterprise value.
I am sure you will agree this is undervalued.
To immediately get your hands on this value investment idea (for as little as €39) click here.
|
|
