Jerry-
It's true that BTIM doesn't fit those criteria. I use several variations of my screening criteria. But BTIM wouldn't qualify as a fundamentally good stock, because there are no earnings, etc. But there is a little room in my portfolio for highly speculative stocks like BTIM. For most of my stocks, though, I stick to fairly strict financial, operational and valuation criteria.
Historically, I have focused on stocks below $1 billion in market cap (although I do still own CSCO. I wish I had bought it when its market cap was less than $1 billion!). Aside from THQI, most small caps have been above $100 million in market cap.
I have begun to explore the more interesting pool of candidates in the microcap area between $20 million and $100 million. I think that I have great potential to find good values, because thorough research on small companies is rare, which is why brokerage analysts avoid them. Consequently, they are often undervalued. There are a lot of great values in the market right now. I'm probably the only one saying that.
Aside from their relative anonymity, very small companies have great investment potential because their businesses are typically simple, and their SEC documents can be easily and quickly studied. An added bonus comes from the small float: After buying a low float stock, you wait until some big institution buys shares, and watch the stock climb very quickly.
In addition to occasional screening, I read a lot of material on an assortment of topics, especially health & medicine. That's how I found BTIM. I wouldn't have found it with a screen. But good investing requires a variety of techniques, I believe.
Todd |
