What's the best item to use for finding value stocks?


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trialuser
at 05/03/11 9:02 PM : RE: Value item

PRS675
at 05/03/11 9:54 PM : RE: Value item

KMatras
attachment files at 05/03/11 9:22 PM : RE: Value item

Fraser
at 05/31/12 8:56 AM : RE: Value item

KMatras
at 03/13/12 3:10 PM : RE: Value item

firstatbat
at 03/13/12 11:07 AM : RE: Value item

raypsure
at 06/01/11 5:09 PM : RE: Value item


Thanks for kind words.

In the book, I listed the optimum valuation ranges for five of the most popular value items: P/E, P/S, PEG, P/CF, P/BV. If you're looking for value stocks with a longer term outlook, I'd still use the Zacks Rank (less than or equal to 2). And I'd add in any or all of the aforementioned value items. BUT, if you buy a Zacks Rank 1, and your intention is to hold onto these picks a little longer, then no need to immediately get out of it if it becomes a Zacks Rank 2. Give it room so you can hold it a little longer. The Zacks Rank 1s will turn over more quickly than a universe of 1s and 2s.

For my value stocks, I like adding in quarterly upward earnings estimate revisions. True, a lot of the upward earnings estimate revisions will be reflected in the Zacks Rank, although it focuses more on the current year and the next year. But adding in upward revisions on the current quarter and the next quarter can be beneficial as well. This also suggests that these stocks (which may be a bit overlooked -- one of the hallmarks of a deeply discounted stock) is seeing a meaningful enough increase in their immediate earnings outlook if the analysts covering them are increasing their upcoming numbers.

As an added bonus, try and stick with a strong industry (preferably top 50% of industries). Usually, that lends itself to a longer shelf-life. Additionally, I've had great success looking for weekly increases in volume. Oftentimes, that will represent insitutional buying. And large investors that move big money in a stock are usually in it for a period of time, especially since it may take them a few weeks or more just to build a position.  


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