23 Top Stock Picks

Follow me on Twitter!

I conduct the following screen on a monthly basis. Last month’s list of 22 stocks is here and returned an average of 15.45% for the top 5 stocks on the list versus .59% for SPY.  The entire list of 22 stocks last month returned an average of 7.82%, led by Questcor Pharmaceuticals, Inc which returned over 39%for the 1 month period and Deckers Outdoor which returned over 36%.
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.
This strategy of screening stocks has produced stellar returns since this summer. For example, August’s list returned a whopping 16.17% versus 7.87% for SPY and July’s top 5 stocks returned over 19%.  

When the screen results in more than 5-10 stocks I have also started tracking returns of the top  5 stocks at the beginning of each list.  The stocks are ranked based on fundamental factors.

The rational for this screen is based on backtests showing stocks with low PEG ratios, debt, and high returns on equity and price momentum have produced excellent returns.  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 SP 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 SPY.

Below are 1, 3, and 5 year test results if an investor were to invest in the top 5 stocks in this screen every 4 weeks and moving to cash when the SP 500 was below its 200 day moving average.  Test results exclude commissions but include .5% slippage:



This month’s list contains 23 stocks versus 22 last month.  The top stock on the list is Metropolitan Health Networks, MDF, which has made multiple appearances on this stock list.  Apple, AAPL, remains on this month’s list while DECK, one of last month’s leaders, has been removed.

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. For the full list of stocks and results, please see the right hand side of Scott’s Investments.

No positions in stocks mentioned


Ticker Name Trend Rank MktCap Industry
MDF Metropolitan Health Networks, Here 99.13 172.31 Healthcare Facilities
AIT Applied Industrial Technologi Here 99.07 1301.74 Misc. Capital Goods
LRCX Lam Research Corporation Here 98.51 5732.04 Semiconductors
THO Thor Industries, Inc. Here 98.09 1927.35 Mobile Homes & RVs
DDMX Dynamex, Inc. Here 97.91 231.16 Air Courier
EZPW EZCORP, Inc. Here 97.24 1289.95 Consumer Financial Services
JOSB Jos. A. Bank Clothiers, Inc. Here 96.46 1216.11 Retail (Apparel)
FCFS First Cash Financial Services Here 95.11 880.34 Retail (Specialty)
NTES NetEase.com, Inc. (ADR) Here 93.07 4993.88 Casinos & Gaming
CNU Continucare Corporation Here 92.37 288.3 Healthcare Facilities
IDCC InterDigital, Inc. Here 89.69 1512.15 Communications Equipment
ARGN Amerigon Incorporated Here 88.91 240.95 Auto & Truck Manufacturers
AAPL Apple Inc. Here 88.46 288951.81 Computer Hardware
TSM Taiwan Semiconductor Mfg. Co. Here 85.83 56988.05 Semiconductors
SNHY Sun Hydraulics Corporation Here 85.44 538.49 Misc. Fabricated Products
QCOR Questcor Pharmaceuticals, Inc Here 83.15 915.76 Biotechnology & Drugs
DECK Deckers Outdoor Corporation Here 82.73 2797.94 Footwear
NVEC NVE Corporation Here 81.74 240.39 Semiconductors
GSOL Global Sources Ltd. (Bermuda) Here 81.16 302.8 Printing & Publishing
AZO AutoZone, Inc. Here 80.35 11579.5 Retail (Specialty)
CTCM CTC Media, Inc. Here 76.28 3569.98 Broadcasting & Cable TV
CPRT Copart, Inc. Here 62.11 3027.95 Retail (Specialty)
PCLN priceline.com Incorporated Here 47.69 20172.09 Business Services

Business and Economics Books of the Year

From the Financial Times, below are their books of the year in the business & economics section (source FT.com):

The Fearful Rise of Markets: Global Bubbles, Synchronized Meltdowns, and How To Prevent Them in the Future John Authers (Hardcover – Apr 26, 2010)

The End of the Free Market: Who Wins the War Between States and Corporations? Ian Bremmer (Hardcover – May 13, 2010)


Banking on the Future: The Fall and Rise of Central Banking Howard Davies, David Green (Hardcover – May 2, 2010)


The Art of Choosing Sheena Iyengar (Hardcover – Mar 1, 2010)

The Facebook Effect: The Inside Story of the Company That Is Connecting the World David Kirkpatrick (Hardcover – Jun 8, 2010)


The Big Short: Inside the Doomsday Machine Michael Lewis (Hardcover – Mar 15, 2010)


More Money Than God: Hedge Funds and the Making of a New Elite Sebastian Mallaby (Hardcover – Jun 10, 2010)


Zombie Economics: How Dead Ideas Still Walk among Us John Quiggin (Hardcover – Oct 3, 2010)


Fault Lines: How Hidden Fractures Still Threaten the World Economy Raghuram G. Rajan (Hardcover – May 24, 2010)


The Rational Optimist: How Prosperity Evolves Matt Ridley (Hardcover – Jun 1, 2010)


Freefall: America, Free Markets, and the Sinking of the World Economy Joseph E. Stiglitz (Paperback – Oct 4, 2010)


Macrowikinomics: Rebooting Business and the World Anthony D. Williams, Don Tapscott (Hardcover – Sep 28, 2010)




Follow me on Twitter!

More on this topic (What's this?)
Zayo Bumps Affiniti Off of EAGLE-Net
S&P Sees Support Near 2010
Read more on Chun Yuan Steel at Wikinvest

Weekend Reads + Shopping

Don’t forget this shopping season that you can help support this blog by shopping on Amazon. Please use the link to Amazon on the left hand side of the page to access Amazon (under the “Subscribe To” section). By accessing Amazon via my site, any products you purchase on Amazon will earn me a very small commission. You do not need to purchase the item that is pictured on the link, any item purchased on the Amazon site qualifies if you link to it via my site. Accessing Amazon via my site does not impact the price you pay for any products, so you literally have nothing to lose!

TICK: Not Just a Bloodsucking Insect – Tom McClellan

S&P 500: Caveat Emptor! – Prieur du Plessis

Shadow Over Asia – John Mauldin’s Outside the Box

Invest Globally in Domestic Bliss – Jim Jubak

Trade stocks for free through Zecco.com, the Free Trading Community. www.zecco.com

Follow me on Twitter!

More on this topic (What's this?) Read more on Amazon.com at Wikinvest

A 5 Stock Portfolio That Has Crushed the S&P 500 With Lower Volatility (Update)

Follow me on Twitter!

A reader asked me to revisit a previous article I wrote in March of 2010.  The original article is here and the strategy is simple: Using AlphaClone to “clone” or track public filings of hedge funds or institutional investors I backtested a clone of 10 institutional managers selected by Mebane Faber (author of The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets).  The ten institutions in the clone are Appaloosa Management, Baupost Group, Berkshire Hathaway, Blue Ridge Capital, Eminence Capital, Greenlight Capital, Lone Pine Capital, Maverick Capital, Private Capital Management, and Tiger Global Management.  The particular clone I ran purchases the top 5 most popular stocks among these 10 managers as determined by how many managers hold a stock in their top 20 holdings (AlphaClone allows you to run a variety of strategies based on any number of clones) and the stocks are weighted within the portfolio based on popularity; in other words, the more funds hold the stock, the higher the weighting within the portfolio.  The stocks in the clone are then rebalanced quarterly.

A long only portfolio of 5 stocks invested in this clone had the following returns since 2000, soundly beating the S&P 500 every year:

Yearly Returns


Year Clone SP500 +/-
2000 -1.8% -8.2% 6.4%
2001 18.4% -11.9% 30.3%
2002 -16.5% -22.1% 5.6%
2003 41.9% 28.7% 13.2%
2004 40.8% 10.9% 29.9%
2005 21.8% 4.9% 16.9%
2006 21.7% 15.8% 5.9%
2007 12.7% 5.5% 7.2%
2008 -29.1% -37.0% 7.9%
2009 55.9% 26.5% 29.4%
2010 15.6% 7.8% 7.8%

Performance Statistics as of 2010-11-24


3 YEAR 5 YEAR INCEPTION
Total Return 29.2% 74.9% 314.3%
Annualized Return 9.2% 12.0% 13.9%
Annualized Volatility 22.8% 19.8% 19.8%
Sharpe Ratio 0.2 0.4 0.5
Max Drawdown -38.9% -42.1% -42.0%
Average Turnover 50.0% 50.0% 50.0%
Alpha 13 11.3 13.5
Correlation S&P 0.9 0.9 0.7

The year to date performance by month for the unhedged is:

Date Clone SP500
1/29/2010 -6.7% -3.6%
2/26/2010 5.0% 3.1%
3/31/2010 8.8% 6.0%
4/30/2010 4.9% 1.6%
5/31/2010 -6.3% -8.0%
6/30/2010 -6.0% -5.2%
7/30/2010 8.3% 7.0%
8/31/2010 -6.9% -4.5%
9/30/2010 11.4% 8.9%
10/29/2010 3.6% 3.8%
11/23/2010 1.0% 0.0%

For those who more risk-adverse, AlphaClone allows you to backtest returns if you hedged a clone 25, 50, 75, or 100%. I hedged the identical portfolio above 100%, which means that a short position in the S&P 500 was always in place for an equal amount of the total long positions. Given that we have gone through 2 nasty bear markets since 2000, the hedged portfolio shows slightly better returns since inception but with much lower volatility than the long only strategy and has not had a down year in the past decade:


Yearly Returns


Year Clone SP500 +/-
2000 6.9% -8.2% 15.1%
2001 30.6% -11.9% 42.5%
2002 6.6% -22.1% 28.7%
2003 10.0% 28.7% -18.7%
2004 27.5% 10.9% 16.6%
2005 16.6% 4.9% 11.7%
2006 5.4% 15.8% -10.4%
2007 7.3% 5.5% 1.8%
2008 12.6% -37.0% 49.6%
2009 21.9% 26.5% -4.6%
2010 7.9% 7.8% 0.1%
Performance Statistics as of 2010-11-24



3 YEAR 5 YEAR INCEPTION
Total Return 44.6% 68.5% 307.6%
Annualized Return 13.5% 11.2% 13.7%
Annualized Volatility 7.9% 8.7% 13.8%
Sharpe Ratio 1.2 0.8 0.7
Max Drawdown -3.1% -7.9% -20.2%
Average Turnover 50.0% 50.0% 50.0%
Alpha 9.4 7.2 9.3
Correlation S&P 0 0 -0.1

The year to date performance by month for the 100% hedged is:

Date Clone SP500
1/29/2010 -3.1% -3.6%
2/26/2010 1.9% 3.1%
3/31/2010 2.7% 6.0%
4/30/2010 3.3% 1.6%
5/31/2010 1.7% -8.0%
6/30/2010 -0.8% -5.2%
7/30/2010 1.3% 7.0%
8/31/2010 -2.4% -4.5%
9/30/2010 2.4% 8.9%
10/29/2010 -0.2% 3.8%
11/23/2010 1.0% 0.0%

Now matter which way you backtest this clone it has outperformed the SP 500 by a wide margin. For the risk adverse, one of the second two strategies offer a safer way to hold stocks while hedging your position. Keep in mind that this is just one clone of potentially hundreds you can run using AlphaClone and used one strategy (top 5 popularity) among many. The ability to replicate top institutional investors has a track record of success but to be honest even I was a bit surprised by how wide of a margin even the ‘safe’ strategies outperformed the SP 500.

For those interested in the current portfolio:

NAME TICKER CLOSE REBALANCE


11/24/2010 11/19/2010
Apple Inc AAPL $313.36 $306.73
Hewlett-Packard Co HPQ $43.25 $42.49
Pfizer Inc PFE $16.63 $16.80
Microsoft Corp MSFT $25.73 $25.69
JP Morgan Chase & Co JPM $38.51 $39.41

Disclosures: I am an AlphaClone affiliate and use their service frequently. No positions in stocks mentioned.

Perception is Everything

Below is a brief article from Adam Hewison of MarketClub along with a free video at the bottom of the page. Enjoy the Holiday!

It’s more important to the market than Ireland, Greece, Portugal, and Spain combined

The trials and tribulations of these four countries (that have run up huge deficits) have been well known for quite some time. What is more important in my opinion is not the size of the debt, which is staggering, but rather what is going on with market perception.

Market perception trumps everything else out there. Market perception trumps market fundamentals every time. Market perception is the one card that the government cannot control. It is the card that can potentially give the individual trader an edge.

So what is market perception? Well, have you ever noticed that when some big world event happens, or a new “hot” IPO hits the markets, traders expect that market to go in the talked about direction and typically it does. What doesn’t get talked about is how the market then corrects itself and the technicals really come into play.

The only real way to avoid the trap is through the use of technical analysis, or in the case of MarketClub, our “Trade Triangle” technology. This technology doesn’t read the newspapers, doesn’t watch cable news, and is independent of everything else except the market itself.

What is the most important thing to most investors? I would have to say it is the bottom line. If you’re not making money in the market, then you’re doing something wrong. Maybe you’re paying more attention to the talking heads on cable, or to the nightly news, but you’re not really paying attention to market perception.

I was lucky enough when I began my career to learn about technical analysis very early on. I said to myself, when it can be this easy there must be something more that I’m missing. It was then that I made the mistake of looking at all these other so-called tools like fundamentals, earnings reports, etc. You name it, I looked at it.

One day I finally got smart and realized that I had already found the “true gold” in trading by using technical analysis.

I was just watching some talking head author on TV and they were saying that technical analysis is so 1920’s and old technology. Of course, the person who was saying that was looking to sell copies of their book.

I said to myself, boy oh boy, not to look at technical analysis, which is like the DNA of the market, is a huge mistake. I can see people going out and buying this author’s book and being led down the wrong path. I will not name the book as readers of this gobbledygook are going to spin their wheels only to find that it really doesn’t work.

Let’s keep things simple. That is the secret to successful trading.

At MarketClub we tend to look at the market in a very simple fashion. Let me explain; the market can only do three things: it can go up, it can go down, and it can go sideways. In life there are very few things that you can simplify as easily as that.

So using MarketClub’s “Trade Triangles” you are able to determine when the market is going up, in which case you want to be long, and when the market’s going down, in which case we want to be short or out of the market.

Now of course we do filter the “Trade Triangles” of MarketClub to help avoid trading losses. With any kind of trading or investing program the risk of loss is always there. The key to success is how you manage those losses. Are the losses small enough as to not bite into your capital in a major way?

Again, when you’re looking at market fundamentals or other ways to trade, they really don’t tell you when to get out. Obvious examples of this would be the Enron scandal or the recent GM debacle that took unwary investors to the poor house.

But it’s hard to fake a market saying everything is great, when the market is heading south. So what is an investor to think? I believe you have to trust your eyes and the direction of the market. After all, that’s what makes up your bottom line.

In today’s video we’re going to be looking at one or two markets and how the “Trade Triangles” are positioned right now. We are not predicting what’s going to happen in the future. We are simply going to look at the purity of the “Trade Triangles” and how they can help investors with the most important market element of all, market perception.

As always our videos are free to view and there are no registration requirements.

Enjoy the video.

All the best,

Adam Hewison

President of INO.com

Co-founder of MarketClub

ETF Rotation Systems Follow-Up

Follow me on Twitter!

For those interested in additional benchmark data for the ETF rotation system I wrote about recently (see here and here), here is some additional data. Return data for buying and holding an equal weight Ivy 5 portfolio and Ivy 10 Portfolio is below and is compared to a system rotating among the top 3 ETFs in each portfolio semi-monthly based on relative strength.

Note that the “Equal Weight” portfolios are rebalanced semi-monthly to maintain an equal weight in all ETFs, due to some limitations in the ETF Replay backtest tool I was unable to lengthen this period while also keeping the same starting period as the rotation systems.  It’s not ideal to assume a semi-monthly rebalance, but this still gives us approximate data of how additional benchmarks compare to the rotation system. Thus, some “trades” would have been made in the buy and hold benchmark in order to maintain equal weight, but for the purpose of this follow-up total trades were listed as “n/a” since the backtest tool does not track rebalance trades.

Data Source: ETF Replay (please note return data was updated through today)


Ivy 5 Portfolio, Rotating Among Top 3 Ivy 5 Equal Weight Ivy 10 Portfolio, Rotating Among Top 3 Ivy 10 Equal Weight
Total Changes (trades) 51 n/a  72 n/a 
Total Return 13.80% 3.4% 80.10% 4.1%
Volatility 19.90% 23.7% 18.30% 23.2%
CAGR 3.40% 0.9% 16.30% 1%
Strategy Drawdown -38.20% -45.3% -22.80% -47.9%
More on this topic (What's this?)
US Market ETF Trading Map
Core ETF Report
#LifeOnMars
Read more on HSBC HLDG, Hong KONG&CHINA Gas, Hang Lung GRP at Wikinvest

Tuesday Reads

As many of us get ready for a short week, here are some readings

Is Gold Overvalued? Tom McClellan

O Deflation, Where is Thy Sting? (pdf) John Mauldin

Richard Russell: Markets in Danger of Shuddering, Tilting and Falling – Over Investment Postcards from Cape Town

Deflation: Japan versus USA – Barry Ritholtz

How to Invest for the Next Bubble – Jim Jubak

Outside the Oval / The Case Against the Fed – John Hussman

Trade stocks for free through Zecco.com, the Free Trading Community. www.zecco.com

Follow me on Twitter!

ETF Rotation Systems – Do More ETFs Mean Higher Returns Part 2

Last week I asked when using tactical asset allocation and ETF rotation systems, does the number of ETFs an investor chooses from impact returns? In other words, will rotating between 5 ETFs under-perform a system that rotates among 20?  The answer seems apparent, more options should lead to higher returns.  Last week’s test evaluated 3 different portfolios of 5, 10, and 25 ETFs in which the top 1 ETF in each portfolio was purchased in a semi-monthly basis.  I concluded “There was a slight increase in returns as the investment pool increased but the increase was not as large as I had expected.”

While much of my interest in tactical asset allocation was initially inspired by Mebane Faber’s The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets, this test was done using a different method available for free using etfreplay.com.  I have written about this method on several occasions on my siteand also track a free portfolio on a monthly basis. The primary difference between the Ivy Portfolio strategy is the etfreplay rotation system purchases the top ETFs based on a combination of returns and volatility and does not require the ETF to be trading above a moving average.

As with last week, this test used a combination of 3 month returns, 20 day returns, and 20 day volatility to rank ETFs. The ETF is not required to be trading above any moving average to be available for purchase. The test purchased the top 3 ETFs and rebalanced semi-monthly (twice per month), which leads to higher turnover although with the introduction of free ETF trades and free equity trades, the added cost of commissions could be minimal. 

The first portfolio examined is Faber’s Ivy Portfolio of 5 ETFs with one exception, I used AGG instead of BND because AGG has a longer trading history and the two are highly correlated.  Thus, the first portfolio tested was AGG, DBC, VEU, VNQ, and VTI.  The returns starting in 2007:

Total Changes (trades) 51

Total Return 15.7%
Benchmark (SPY) Return -8.1%

Volatility 19.9%
Benchmark Volatility 27.7%

CAGR +3.8%
Benchmark (SPY) CAGR -2.1%

Strategy Drawdown -38.2 %
Benchmark Drawdown -50.9%


Next, I tested the 10 ETF portfolio suggested in Faber’s book with again the substitution of AGG for BND.  Eight of the 10 ETFs were trading at the start of 2007, the remaining 2 began trading in mid 2007. The ETFs are AGG, DBC, GSG, RWX, TIP, VB, VEU, VNQ, VTI, and VWO. The results:


Total Changes (trades) 72
Total Return 83.5%
Benchmark (SPY) Return -8.1%
Volatility 18.3%
Benchmark Volatility 27.7%
CAGR +16.9%
Benchmark (SPY) CAGR -2.1%
Strategy Drawdown -22.8%
Benchmark Drawdown -50.9%




Finally, I tested the “broad mix” portfolio I track for free on my site consisting of 25 ETFs.  Of the 25 on the list, only 15 were trading at the start of 2007 which limits the tests to an extent.  The 25 ETFs are BWX, DBA, DBB, DBC, DBV, EEM, EFA, GLD, HYG, IEF, LQD, LSC, PCY, PFF, RWX, SCZ, SHY, SPY, TIP, TLT, VBR, VNQ, WIP, XLE, and XLU.

By the start of 2008 20 of the 25 ETFs were trading.  The results:


Total Changes (trades) 81
Total Return 131.3%
Benchmark (SPY) Return -8.1%
Volatility 15.1%
Benchmark Volatility 27.7%
CAGR +24.1%
Benchmark (SPY) CAGR -2.1%
Strategy Drawdown -8.9%
Benchmark Drawdown -50.9%


Last week I predicted “if the top 3, for example, in each portfolio were purchased semi-monthly we would see a widening of the performance gap between the small (5) ETF portfolio and the large (25) ETF portfolio.”   As the returns above show, there was a significant performance gap between the 5 and 25 ETF portfolios, when purchasing the top 3 based on relative strength.

Given the relative short trading histories of many ETFs, it is difficult to draw many conclusions from a small sampling. However, a few things are evident. All three of the ETF portfolios/strategies still clearly outperformed the benchmark, SPY, when purchasing the top 3. However, the 5 ETF portfolio’s performance when buying the top 3 suffered significantly when compared to last week’s strategy of purchasing the top 1.  When purchasing more than 1 ETF per month, the larger the potential pool of ETFs, the better the returns when using the parameters cited in this article.


Finally, and perhaps most importantly, purchasing the top 3 ETFs out of 25 resulted in almost identical returns to purchasing the top 1 ETF out of 25, but with lower volatility and drawdowns.
For those interested, below is a spreadsheet summarizing returns side by side for the “top 3” strategy:



Ivy 5 Portfolio
Ivy 10 Portfolio
Broad Mix
Benchmark (SPY)
Total Changes (trades) 51 72 81 none
Total Return 15.70% 83.50% 131.30% -8.10%
Volatility 19.90% 18.30% 15.10% 27.70%
CAGR 3.80% 16.90% 24.10% -2.10%
Strategy Drawdown -38.20% -22.80% -8.90% -50.90%

Follow me on Twitter!

More on this topic (What's this?)
Core ETF Report
Using an ETF Portfolio
US Market ETF Trading Map
Read more on Exchange Traded Fund (ETF) at Wikinvest

10 Microcap Value Stocks

Trade stocks for free through Zecco.com, the Free Trading Community. www.zecco.com

Follow me on Twitter!

I am a member of AAII (American Association of Individual Investors) and one of their more popular screens is the Shadow Stock Screen.  I conduct a close replication of this screen on a monthly basis.  This is a very simple screen that seeks out small/microcap value stocks.  The screen criteria I use (as of last month, adjustments to be made this month; see below) are:

  • No over-the-counter stocks
  • No financial stocks
  • Market cap > $20 Million and < $200 million
  • Previous EBITDA quarter and trailing twelve months are positive
  • Share price > $4
  • Price/book < .80
  • Price/sales < 1.2
  • Top 10 stocks are selected based on highest 52 week returns

This is the eight month of performing the screen.  Last month’s results were astounding at 9.03% for one month, led by Cagles (CGL.A) which returned an incredible 42.83% for the month.  However, at closer glance the shadow stock screen and my variation of the screen have a liquidity drawback.  There is no minimum volume requirement, so a stock like Cagles could be difficult to find a liquid market in which to trade. Thus, I have decided to add a minimum requirement of 5k shares daily, which by no means guarantees a liquid market but will eliminate some microcap stocks which have little to no trading, often times trading 0 shares in a day (such as Continental Materials, CUO, from last month’s list).  


Adding this volume requirement to last month’s list would have resulted in a slightly different list of 10 stocks, returning an average of 8.65%, led by Escalade (ESCA), a company specializing in the manufacturing and sale of sporting goods. ESCA also announced a $.10/share dividend on November 9th, which gives it a current yield of 2%. The company had paid an annual dividend from 2004-2008 before skipping the 2009 dividend. The stock remains on this month’s list.


I have also made a new adjustment to the share price requirement. The AAII  Shadow Stock screen required a share price greater than $4.  I am removing this requirement and replacing it with a share price requirement of greater than $1.

 
The strategy tends to be high beta – it performs very well in bullish markets and may underperform in bear markets. You can see on the 5 year return chart below that the screen struggled most in 2008 along with the rest of the market (returns on the charts assume .5% slippage but do not account for commissions or taxes) and the 1 year results have been close to 50%. I said previously that “this is not a strategy I am investing in.  However, if an investor was looking to add some risk to his or her portfolio, this one could certainly add some ‘juice’.”  One additional option which I have mentioned on other screens is to abandon this type of strategy or move to cash when an underlying index such as the Russell 2000 is trading below a long term moving average such as the 200 day moving average.  Currently the Russell 2000 is above its 200 day moving average. 






The current top 10 stocks are also below.  I update the screen once per month on my site and track the results for free on the right hand side of the site. Full results for all months can be viewed on the right side of Scott’s Investments under “Micro Value Screen”. The tool used for the screen is stockscreen123. No positions in stocks mentioned

Ticker Name Free Trend Analysis Rank MktCap Industry
STRC SRI/Surgical Express, Inc. Here 98.13 28.2 Personal Services
ESCA Escalade, Inc. Here 94.97 65.57 Recreational Products
IMOS ChipMOS Technologies (Bermuda Here 94.65 160.79 Semiconductors
AHC A. H. Belo Corporation Here 91.25 176.17 Printing & Publishing
FFHL Fuwei Films (Holdings) Co., L Here 85.64 26.61 Fabricated Plastic & Rubber
GFN General Finance Corporation Here 85.36 40.72 Real Estate Operations
TIII Tii Network Technologies, Inc Here 82.55 25.78 Electronic Instr. & Controls
HAST Hastings Entertainment, Inc. Here 82.1 60.09 Retail (Specialty)
MDH MHI Hospitality Corporation Here 80.07 22.52 Real Estate Operations
SVLF Silverleaf Resorts, Inc. Here 73.6 40.79 Hotels & Motels

Help Support This Blog, For Free!

If you enjoy the free content provide by me, please take a second this shopping season to support the blog.  If you shop on Amazon, please use the link to Amazon on the left hand side of the page to access Amazon (under the “Subscribe To” section). You can either click on the ‘Amazon.com’ link or the item that is pictured.

By accessing Amazon via my site, any products you purchase on Amazon will earn me a very small commission. You do not need to purchase the item that is pictured on the link, any item purchased on the Amazon site qualifies. Accessing Amazon via my site does not impact the price you pay for any products, so you literally have nothing to lose and it is a great way to show your support for this free site during the holiday shopping season or any time of year!

Thanks and happy shopping!

Follow me on Twitter!