Top Stocks Based on PEG and Momentum Versus The S&P 500 ETF (SPY)
I have begun conducting the following screen on a monthly basis. Early out-of-sample results have been positive, especially during bullish environments. 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.
The Euro’s Demise Has Been Set in Motion: Are you protected?
"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."
CLICK HERE to get your Free E-Book, “Why It’s Curtains for the Euro”
January’s list returned 1.39% vs .57% for the S&P 500 ETF (NYSE:SPY). February’s list returned a solid 11.78% vs. 6.77% for (NYSE:SPY). March returned 7.91% vs. 4.23% for (NYSE:SPY), April was a tough month returning -11.57% vs -11.52% for (NYSE:SPY), and May’s list returned -6.55% vs -.56% for (NYSE:SPY). One note on May’s list is that due to the pullback in the market there were very few stocks that qualified for the list, four in total.
When the screen results in more than 10 stocks I have also started tracking returns of the top 10 stocks at the beginning of each list, the top 10 are selected based on fundamental factors. The top 10 on March’s list returned an average of 10.77% and the top 10 for April did slightly better than the entire list returning -8.01%. This month has less than 10 qualifying stocks. 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 (NYSE:SPY).
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 | Last | MktCap | Industry |
| (MDF) | Metropolitan Health Networks, | 3.99 | 159.26 | Healthcare Facilities |
| (ARO) | Aeropostale, Inc. | 29.62 | 2770.17 | Retail (Apparel) |
| (UTI) | Universal Technical Institute | 24 | 578.8 | Schools |
| (FCFS) | First Cash Financial Services | 21.93 | 660.34 | Retail (Specialty) |
| (DECK) | Deckers Outdoor Corporation | 155.05 | 1999.68 | Footwear |
| (LRCX) | Lam Research Corporation | 40.25 | 5092.99 | Semiconductors |
| (QCOR) | Questcor Pharmaceuticals, Inc | 11.24 | 697.39 | Biotechnology & Drugs |
Written By Scott From Scott’s Investments
SPDR S&P 500 ETF (NYSE:SPY) Visit Our SPY Category: HERE
The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index (Ticker: SPTR). Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
| TOP 10 HOLDINGS ( 19.26% OF TOTAL ASSETS) |
|
Most Comments