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Stock Picking Process. Securities offered through LPL Financial. Member FINRA/SIPC. Stock investing involves risk including loss of principal. Our Objective. To reduce the universe of all possible stocks in the market to the top 25 stocks that provide a high probability of success. - PowerPoint PPT Presentation
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Stock Picking Process
Securities offered through LPL Financial. Member FINRA/SIPC. Stock investing involves risk including loss of principal.
Our Objective
To reduce the universe of all possible stocks in the market to the top 25 stocks that provide a
high probability of success.
No strategy can assure success or guarantee against loss in declining markets. General risks inherent to investments in stocks include the fluctuation of market prices and dividend, loss of principal, market price at sell
may be more or less than initial cost and potential illiquidity of the investment in a falling market
Master List Top 400 Stocks
Scoring Process
Final List TOP 25 STOCKS
Popular Lists
Ultimate List Top 100 Stocks
Analyst FavoritesCategory
Value Categor
y
Growth Category
Sentiment Category
Second Screen
Quality Category
Screen-Based List Current List
First Screen
INVESTING UNIVERSE
400
Investing Universe
10,000+ Stocks
25 Stock Stars
Ultimate List
100 Stocks
100
Master List
400 Stocks
INVESTING UNIVERSE
First ScreenThree Evaluation
Lists
Current List:- Current
Nominees- Personal
Nominees
Screen-Based List:
- Value Screen- Growth Screen- Momentum
Screen
Master ListTOP 400 Stocks
Popular List:- Top 50 stocks
IBD- Top 100 stocks
VL- Top 36 stocks
SS- Top 37 stocks
MS- Top 50 stocks B
INVESTING UNIVERSE
First ScreenThree Evaluation Lists
Current List:- Current Nominees- Personal
Nominees
Screen-Based List:- Value Screen- Growth Screen- Momentum Screen
Master ListTOP 400 Stocks
Popular List:- Top 50 stocks IBD- Top 100 stocks VL- Top 36 stocks SS- Top 37 stocks MS- Top 50 stocks B
SCREEN-BASED LIST
Investment Style:VALUE Screen Tests
Investment Style:MOMENTUM Screen Tests
Growth Screen 2
Comparative & Financial
Strength
Stock Screener
Growth Screen 1
Relative Growth
Value Screen 1
Relative Value
Value Screen 2
Comparative Value & Growth
ValueScreen 3
Contrarian Opportunities
Growth Screen 3
Comparative & Sustainable
Growth
Momentum Screen 2
Moving Average & Behavioral
Momentum Screen 3
Relative Momentum
Investment Style:GROWTH Screen Tests
Momentum Screen 1
Relative Strength
Stock Screener Stock Screener
Screen-Based Tests *
*The formulas have been altered to protect Proprietary Information
1. P/E Ratio <= Indy. Avg. P/E2. Price/Sales <= Indy. Avg. P/S3. TTM ROE > Indy. Avg. TTM ROE4. TTM ROE > 05. 5 y Avg. ROE > 5 Y Indy. Avg. ROE6. LT Debt/Equity ratio <= Indy. Avg. LT Debt
Ratio7. Price/Book <= 38. EPS Growth Est. > Indy. Avg. EPS Growth Est.9. Y1 EPS Est. Growth > 0
Value Screen 2: Comparative Value
FIELDOPERATO
R COMPARE TO: STOCKSP/E Ratio <= Indy. Avg. P/E 2190
Price/Sales <= Indy. Avg. P/S 3581TTM ROE > Indy. Avg. TTM ROE 4464TTM ROE > 0 5909
5 Y Avg. ROE > 5 Y Indy. Avg. ROE 3452LT Debt/Equity
Ratio <=Indy. Avg. LT
Debt/Equity Ratio 3864
Price/Book <=Average Price/Book
Ratio 5459
EPS Growth Est. >Indy. Avg. EPS Growth
Est. 12361Y EPS Est.
Growth > 0 832
Screen Results: Value Screen 2
Securities offered through Triad Advisors, member FINRA/SIPC. Advisory services offered through Lee Johnson Capital Management, LLC (LJCM). LJCM is an independent Registered Investment Advisor and is not affiliated with Triad Advisors.
7 COMPANIES MET THE CRITERIA: AS OF February 28, 2013 COMPANY NAME SYMBOL SECTOR
MYR Group Inc MYRG Capital GoodsVirtusa Corporation VRTU Technology
Assurant, Inc. AIZ FinancialHub Group Inc HUBG Transportation
Jones Lang LaSalle Inc JLL ServicesKulicke and Soffa Industries KLIC TechnologyUSANA Health Sciences, Inc. USNA Conglomerates
INVESTING UNIVERSE10,000 + Stocks
Master List TOP 400 Stocks
First Screen
Second Screen
Analyst FavoritesCategory:
1.Most Repeated
Stocks
Value Category
:1.Catchin
g Up Stocks
Quality Category
:1.Industry Leaders2.Fastest Turnover
Growth Category:1.Historical comparison2.Industry
Comparison
Sentiment Category:1.High P/E Multiples
2.Institutional
Ownership
Second Screen
Master List Top 400 Stocks
Second Screen*
*The formulas have been altered to protect Proprietary Information
Third Screen
Ultimate List: Top 100
Scoring Process:- Growth Score- Profitability Score- Financial Health
Score- Momentum Score
Stock Stars ListTOP PROBABILITY STOCKS
• %Chg = Percentage Change.
• 1Q = Recent quarter.
• Asset turnover = The amount of sales generated for every dollar’s worth of assets.
• CF = Cash Flow: a revenue or expense stream that changes a cash account over a given period.
• Current Ratio = A liquidity ratio that measures a company’s ability to pay short-term obligations.
• D = Days (example: 27D=27 Days)
• EPS = Earnings Per Share: the portion of a company’s profit allocated to each outstanding share of
common stock.
• EPS Est. = An analyst’s estimate for a company’s future annual EPS.
• FCF = Free Cash Flow: a measure of financial performance calculated as operating cash flow minus
capital expenditures.
• Gr. = Growth.
• Inventory Turnover = A ratio showing how many times a company’s inventory is sold and replaced
over a period.
• LT Debt/Equity Ratio = Long-Term Debt/Equity Ratio: a measure of a company’s financial leverage
calculated by dividing its long-term debt by stockholders’ equity.
• Net Income = A company’s total earnings (or profit).
• Net Margin = The ratio of net profits to revenues for a company, expressed as a percentage.
• Price/Book Ratio = A ratio used to compare a stock’s market value to its book value.
• P/E = Price to Earnings Ratio: A valuation ratio of a company’s current share price compared to its
per-share earnings.
• P/FCF = Price to Free Cash Flow Ratio: A valuation metric that compares a company’s market
price to its level of annual free cash flow.
Glossary of Screen-Based Tests
Investopedia AAII
• P/S = Price to Sales Ratio: A ratio for valuing a stock relative to its own past performance,
comparing a company’s market price to its level of annual revenue.
• Pr = Price (example: Pr4D%Chg=Four day price percentage change)
• Price/CF = Price to Cash Flow: A measure of the market’s expectations of a firm’s future
financial health.
• Q1 = Present quarter
• Q2 = One quarter prior to the present quarter
• Q3 = Two quarters prior to the present quarter
• Q4 = Three quarters prior to the present quarter
• Q5 = Four quarters prior to the present quarter
• Q6 = Five quarter quarters prior to the present quarter
• Relative Strength = A measure of price trend that indicates how a stock is performing relative
to other stocks in its industry.
• ROA = Return on Assets: an indicator of how profitable a company is relative to its total assets.
• ROE = Return on Equity: the amount of net income returned as a percentage of shareholders
equity.
• ROI = Return on Investment: A performance measure used to evaluate the efficiency of an
investment. The return of an investment is divided by the cost of the investment.
• TTM = Trailing Twelve Months: The timeframe of the past 12 months used for reporting
financial figures.
• Turnover = The number of times an asset is replaced during a financial period.
• W = Weeks (example: 52W=52 Weeks)
• Y1 = Recent Year
• Y = Yearly (example: Y EPS= Yearly EPS), or Years (example: 3Y= 3 Years)
InvestopediaAAII
Glossary of Screen-Based Tests
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