Being satisfied with the results of my combination screen so far, I wanted to use my criteria to calculate a valuation for many stocks to see at what price my screen would pick them up. I calculated 3 valuation based on my 3 main criteria:
Price/Sales - I want a valuation at less than 1.5 times Price/Sales. To arrive at a valuation, I multiply the revenues per share by 1.5.
Price/Book - I want to keep that criteria under 2. For this one, I multiply the book value per share by 2.
PEG - I choose stocks with a PEG under 1.5. My valuation is calculated by multiplying the long term projected growth (in percent) by the earning per share times 1.5.
In addition, I calculated an average of all 3 valuations just for fun!
I added a column to indicate if the stock was cheap or expensive relative to all criteria and the average. I published a table online that contains the valuation for over 1600 stocks. I'll try to expend it to more later. It can be viewed at this link.
Here are some sample valuations for popular and "momentum" stocks:
Not surprisingly enough, tech stock are usually expensive relative to book and sales, but cheap relative to PEG. With a PEG of 1.5 as a limit, I am overtly generous to growth. But keep in mind that the most important factor in my screen is Price to sales. And in this department, tech and "momentum" stocks fail badly! In this current list, the only stock matching the stock valuation criteria would be BAC, GE, GM, SPWRA and VZ. The last criteria in my screen is that the stock be within 95% of it's 52 week high which these stocks fail. But on a valuation basis, they might be worth a look!
Here are some updated charts for the major indices. They show that we successfully bounced off our first Fibonacci line of support following the "Japan" selloff! QQQQ is definitely the laggard here. It is well below the 50 day MA. SPY will have to hit against it today. Something to keep in mind!
DIA
SPY
QQQ
IWM
Here at last the results from last week! Sorry it's late, I have been buy with other projects! I'll publish only the results for the running portfolio this week and resume full fledge results next week!
For the second time in 7 weeks, the portfolio trailed the broader average last week - only by 0.2%. Overall, the portfolio is up over 6% since inception while the S&P500 just turned negative in the last week. Not bad! This is the last week for this set of stocks as I will rebalance next week after 4 weeks.
TBT is down 3% today so here is a chart to put that in perspective!
Here are some lines for today.
DIA
SPY
QQQQ
Here is a set of updated weekly charts following this morning sell off. We are at important levels now - Fibonacci and regression channel.
DIA
SPY
QQQQ
IWM
And here is the list for this week! As usual, sorted in ascending Price-to-Sales. The top 10 that I will track are hilighted in yellow.
