Hello advalorem,
Well, I've had a chance to update the watch lists so here they are:
From 06/02:
siliconinvestor.com
From 06/09:
siliconinvestor.com
From 06/16:
siliconinvestor.com
From 06/23:
siliconinvestor.com
You'll note that the number of stocks each week will vary somewhat. This is caused by some stocks that passed the filters last week will fail the filter this week or vice versa. (Value Line analysts are always updating their projections for any stock they cover, as both good news and bad news is realized for either the company or the industry where it is located.) Also, Value Line will pick up coverage on new stocks from time to time, and one of these new ones may pass the filter. Acquisitions and mergers may cause a stock to disappear, or may brighten the future considerably for the "new" company. Anyway, the watch list will change from week to week. I'm mostly interested in stocks that make the watch list and stay there for a few quarters. By way of example, the only stock currently on the watch list that I own is ROST.
Now to describe the filter I use. I will refer to this week's watch list numbers as the example.
First of all, I screen the entire database for stocks where Value Line analysts think that the Projected 3 to 5 year % Stock Price Appreciation will meet or exceed 100%, or in other words a likely double in 3 to 5 years. Of all the stocks in the database, only 709 passed this test. On the paper report, you can't see this value, but it is close to a midpoint on the price projections (percentages) that you'll see in the upper left corner of the company report, just under the Timeliness, Safety and Technical rankings.
Next I filter those 709 stocks for those where the VL analysts think that the Projected EPS (earnings per share) Growth Rate will exceed 15% per year. (If you do the math, 15% per year for 5 years, would mean that the EPS would double in 5 years.) That filter further reduces the number of stocks to 243. On the paper company reports, you'll see this figure on the left side of the page, a little more than midway down, labeled as ANNUAL RATES.
The third test I use is to filter for stocks where the VL analysts think that the Projected Book Value Growth Rate will exceed 15% per year (same reasoning as above; a double in 5 years). That now leaves us with only 108 stocks that have passed all three filters so far. On the paper company reports, you'll see this figure on the left side of the page, a little more than midway down, labeled as ANNUAL RATES.
I don't want to look at stocks where Value Line thinks that they're untimely, so I eliminate those stocks that have a Timeliness Rating of 4 or 5. That leaves 89 stocks remaining. On paper, Timeliness is in the upper left hand corner.
I don't want stocks that are extremely volatile to the downside, so I filter out the stocks that carry a Safety Rating of 4 or 5, bringing the number of stocks down to 66. On paper, Safety is in the upper left hand corner.
As a last precaution, I don't want momentum stocks that every Tom, Dick and Harry is trading up in price. So I created my own data field called GPE (which is the Projected EPS Growth Rate divided by the P/E ratio)). What I'm looking for is stocks whose Growth Rate still exceeds their P/E. This last filter brings me down to 53 stocks, which is what you see in the Watch List for 6/23. On paper you don't have GPE. It's a field that I created and it exists only in my database. But you could roughly approximate it by dividing the Earnings Growth Rate (found on the left side of the page, a little more than midway down, labeled as ANNUAL RATES) by the P/E Ratio (found along the top of the company report, approximately in the middle of the first line).
And there you have it. That's all there is to it.
KJC |
