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Seeking Solid Stocks
In early December I found myself with a bit of extra cash to invest. So, I quickly thought of the many features that I wanted in a stock and set off to the Internet to find them. My first task was to find a good, no fee, stock screening utility. After all, I like it when computers do the bulk of the work. It's even better when they do it for free. After hopping around web pages, I visited Microsoft's www.msn.com and took a second look at their stock screener. http://moneycentral.msn.com/articles/common/finderpro.asp Many moons ago I visited this site, but was turned off. You see, to use the msn.com screener you must first download a small program. This time, I took the leap and downloaded the utility. A few moments later I was quite impressed and began my search. I started by looking for stocks that met Graham's defensive investor criteria as outlined in The Intelligent Investor (See Figure 1). However, the msn.com stock screener only has 5 years worth of data. Undaunted, I approximated and out came nine stocks: AIR, HVT, LZB, RLC, RS, TG, THO, WNC and WSO (See Figures 2 & 3).
Being of a suspicious nature, I immediately wondered if this list was too good to be true. After all, I'm painfully aware that it can take some time before an announced dividend cut makes it into the average database. The same goes for earnings declines, revenue shortfalls and all manner of other calamities. The first thing I checked for were precipitous price declines since they are a good sign that extra digging is required. As it happens, none of the nine stocks showed sudden price plummets but many had slowly declined. For instance, THO had dropped from a year high near $30 down to $20. A recent news release explained the problem; third quarter earnings were down 12.5%. Similarly, AIR had fallen from $28.50 to $12. Why? Earnings had declined by 70% from the previous year. The moral of the story is that a good stock screener is just a start. But it's a very handy start. I've now happily played with the msn.com screener for many hours and have been impressed with the robustness and depth of its data. My only major disappointment is the lack of information on Canadian companies. If you've come across a good, free, Canadian stock screener please let me know. I'm still looking for a few more solid stocks.
Additional Resources:
First published in the Feb 2001 edition of the Canadian MoneySaver magazine. |
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| Disclaimers: Consult with a qualified investment adviser before trading. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, financial advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. More... | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
