Over the years, AAII has studied the works of many successful investors. The goal has been to learn from the winning strategies and techniques of investment legends, modern day investment professionals with a proven record of long-term success and even prominent academic research on investing. The desire has been to use this knowledge to create screening strategies that investors can use to identify interesting investment candidates.
Screening is filtering the stock universe down to a small list of attractive stock ideas. (There are around 40 quantitative screening strategies on AAII.com developed from the works of successful gurus, along with 20 screens based upon academic research and investment factors). The screens range from deep value approaches following the philosophy of investment gurus such as Warren Buffett to earnings and price momentum strategies championed by William O’Neil.
Stocks Passing the Most Screens
In looking at the stocks that pass the screens, an interesting question arises: Is a stock that passes multiple screening approaches more attractive than another stock that just passes one screening approach? Possibly, if the screening approaches that a stock passes are based upon solid financial principles and are diverse enough to capture unique yet desirable qualities.
There are 972 stocks that currently pass at least one of the 60-plus screening strategies presented on AAII.com, but there are only 29 exchange-listed stocks passing four or more screens, and they are the stocks that are presented below.
The stocks are ranked by how close their price relates to their 52-week high price. With the dramatic market ups and downs over the course of this year, it is interesting to identify which companies are close to hitting new highs. Evercore
passes eight of our screens and is trading near its 52-week high. Evercore is a global investment banking advisory company.
For the most part, the stocks currently passing multiple screens are meeting the criteria for value or growth approaches that identify companies with low prices relative to company financial measures, such as assets or earnings, or companies exhibiting strong, consistent and prolonged growth. For example, the Buffett Hagstrom screen combines price relative to free cash flow, historical earnings growth, industry-beating margins and return on equity. All these elements are well known and well used by value investors. The approach identifies “excellent” businesses based on the prospects for the industry and the ability of management to capitalize on opportunities for the ultimate benefit of shareholders. When combined, the characteristics help to indicate if a candidate merits further analysis.
The table lists two price-earnings ratio calculations: one based upon trailing earnings per share, and one that is determined using forward earnings expected for the current year. The price-earnings ratio is a basic valuation measure, but it can be more difficult to use during economic turning points. If you see a forward price-earnings ratio that is lower than the trailing ratio, it indicates that analysts are expecting future earnings to be higher.
The market capitalization (number of shares outstanding times the share price) is a common way to measure the size of a firm. With a market cap of $30.5 billion, Cadence Design Systems
is the largest company to pass four or more screens. The company provides solutions that enable its customers to design electronic products.
While you cannot automatically consider a group of consensus stocks to be a diversified portfolio, they may present a good starting point for constructing your personal portfolio. Optimally, the group of screening approaches a stock passes is diverse enough to capture unique, yet desirable qualities.
All-Star Stocks: Stocks Passing the Most Screens (Ranked by Price as a % of 52-Week High)
The stocks meeting the criteria of the approach do not represent a “recommended” or “buy” list. It is important to perform due diligence.
If you want an edge throughout this market volatility, become an AAII member.
U.S. stocks rebound following rout, bond yields dip
U.S. shares rebounded on Thursday after falling for three consecutive days and benchmark Treasury yields dipped, as investors snapped up technology stocks and shrugged off worries about rising prices, for now.
After posting their biggest slump in at least 11 weeks on Wednesday, U.S. shares bounced back as cash-flush investors looked past concerns that accelerating inflation may prompt quicker interest rate hikes, and deployed their funds once more.
So intent were investors on leaving inflation worries aside that financial markets barely responded to Thursday’s data, which showed U.S. producer prices posting their biggest annual gain since 2010 in April.
“It’s rebound Thursday,” said John Augustine, chief investment officer at Huntington Private Bank, which manages $20 billion. “Given the money on the sidelines, investors are going to be coming back in.”
Still, Augustine said investors should re-deploy their funds in a measured way because “inflation concerns are not going away”.
By midday, the Dow Jones Industrial Average had added 1.4%, while the S&P 500 and the Nasdaq Composite narrowed earlier gains to be up 1.3% and 0.9%, respectively.
The MSCI world equity index, which includes 50 countries, also bounced slightly, gaining 0.2%.
U.S. stocks had tumbled earlier this week after data showed U.S. consumer prices unexpectedly jumped by the most in almost 12 years in April.
Some investors now worry that quickening price pressures could lead the Federal Reserve to tighten monetary policy sooner than expected, and reduce its supply of cheap money that has been propelling financial markets higher.
For now, however, inflation woes took a backseat.
Benchmark 10-year Treasury yields, which had spiked 7 basis points overnight in the biggest daily rise in two months, edged down by more than 3 basis points to 1.6625% as investors took a breather.
Benchmark two-year Treasury yields also pulled back to 0.1589%.
Against a basket of major currencies, the dollar was steady at 90.727, holding gains eked out on Wednesday when expectations of rate hikes burnished the currency’s appeal.
A firm dollar capped gains in the euro, which edged up 0.1% to $1.20875. [USD/]
The pull-back in Treasury yields helped gold to recoup some of Wednesday’s losses, when the jump in bond yields dampened the allure of non-yielding bullion. Spot gold climbed 0.7% off a one-week low to $1,825.61 per ounce.
A recent rally in oil prices also paused on Thursday as investors turned their attention to the coronavirus crisis in India, and as a key U.S. fuel pipeline resumed operations.
Brent crude slumped 3.5% to $66.93 a barrel, while U.S. West Texas Intermediate crude lost 3.8% to $63.53 a barrel.
Among cryptocurrencies, bitcoin, which tumbled 13% overnight when Elon Musk said Tesla would stop accepting it as payment because of its high energy use, fell below $50,000 again on Thursday following reports that the U.S. Justice Department is investigating crypto exchange Binance.
By midday, bitcoin had dropped 2.2% to $48.314.
(Reporting by Koh Gui Qing; additional reporting by Tom Wilson and Marc Jones in London; Wayne Cole in Sydney; Editing Nick Macfie, Dan Grebler and Cynthia Osterman)
Dogecoin dropped after Elon Musk calls it a ‘hustle’ on ‘SNL’ show
By Alden Bentley and Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) -The value of dogecoin dropped sharply in early U.S. hours on Sunday, after Tesla chief and cryptocurrency supporter Elon Musk called it a ‘hustle’ during his guest-host spot on the “Saturday Night Live” comedy sketch TV show.
Dogecoin was quoted as low as $0.47 on crypto exchange Binance, down 28% from levels around $0.65 before the show.
The billionaire Tesla Inc chief executive hosted the show at 11:30 p.m. EDT on Saturday (0330 GMT on Sunday).
Cryptocurrency enthusiasts had for days been eager to see what he would say, after his tweets this year turned the once-obscure digital currency into a speculator’s dream.
Asked ‘what is dogecoin’, Musk replied, “It’s the future of currency. It’s an unstoppable financial vehicle that’s going to take over the world.”
When a show cast member Michael Che countered, “So, it’s a hustle?”, Musk replied, “Yeah, it’s a hustle.” And laughed.
Musk is the rare business mogul to have been asked to host the venerable comedy TV show. The timing puts Musk back in the spotlight just as Tesla’s stock is losing steam following last year’s monster rally.
The unconventional CEO has posted numerous comments about cryptocurrencies on Twitter and criticized regular old cash for having negative real interest rates.
“Only a fool wouldn’t look elsewhere,” he said in February.
His cryptic tweets “Doge” and “Dogecoin is the people’s crypto” that month kicked off a rally in dogecoin – created as a parody on the more mainstream bitcoin and ethereum.
On Thursday, Musk tweeted: “Cryptocurrency is promising, but please invest with caution!” with a video clip attached in which he said, “it should be considered speculation at this point. And so, you know, don’t don’t go too far in the crypto speculation …”
But he also said, in the video, that cryptocurrency has a “good chance” of becoming what he called “the future currency of the Earth.”
On crypto data tracker CoinGecko.com, dogecoin has jumped more than 800% over the last month and is now the fourth-largest digital currency, with a market capitalization of $73 billion. It hit a record high Thursday above $0.73.
It has overtaken more widely used cryptocurrencies such as litecoin and tether.
Tesla said in February it bought $1.5 billion worth of bitcoin and would soon accept it as a form of payment for its electric cars, a large stride toward mainstream acceptance that sent bitcoin soaring to a record high of nearly $62,000.
Tesla shares closed 1.3% higher at $672.37 on Friday.
(Reporting by Gertrude Chavez-Dreyfuss and Alden Bentley in New York, and Noel Randewich and Hyunjoo Jin in San Francisco Additional reporting by Joe White and Vidya RanganathanEditing by Matthew Lewis & Simon Cameron-Moore)
Wealthsimple hits $4 billion valuation on funding from Ryan Reynolds, Drake
(Reuters) -Wealthsimple said on Monday it has raised C$750 million ($610.40 million) in its latest funding round, which more than doubled the Canadian fintech company‘s valuation to C$5 billion.
The latest funding round included participation from celebrities Drake, Michael Fox and Ryan Reynolds, according to the company.
The Toronto-based company that has helped make stock trading, peer-to-peer money transfers and tax filing easily accessible, said it will use the amount raised to further expand its market position, product suite and team.
The latest funding round, led by venture capital firms Meritech and Greylock, also includes investments from iNovia, Sagard, TSV and Redpoint.
The funding consists of C$250 million primary fundraising by Wealthsimple and a C$500 million secondary offering by holding company Power Corp of Canada, its largest shareholder.
Wealthsimple said it has seen rapid growth in the past 14 months as Canadians took an interest in stock trading during the COVID-19 pandemic.
Earlier this year, the company said it plans to grow revenue by adding premium features for its clients.
($1 = 1.2288 Canadian dollars)
(Reporting by Eva Mathews and Tiyashi Datta in Bengaluru; Editing by Shailesh Kuber and Shounak Dasgupta)
Commander leading COVID vaccine rollout leaves pending investigation
Worldwide coronavirus cases cross 161.42 million, death toll at 3,488,751
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