While I have had a decent level of investment success over the years, I am the first to admit there is always more to learn. The holiday lull has provided me with the time to invest in learning more about stock screening strategies. This has been courtesy of Stockopedia where I have recently become a featured author.
Stockopedia has 66 pre-defined ‘guru’ screens loaded into their system divided into seven sections; quality investing, growth investing, value investing, bargain stocks, income investing, momentum investing and short selling. There is also the opportunity to create an unlimited number of your own screening strategies. For each of the pre-defined screens there is a clear explanation of the strategy and its metrics, along with the current candidates that are the best fit and a performance record for the strategy over various timeframes.
To be honest, I have been like a kid in a candy store working through the various strategies and the investment potential of the companies highlighted. Each UK company has its own page covering key financials (historic and estimated), common ratios, charts, value score, quality score, momentum score, overall stock rank and a magic formula rating. It also shows which of the 66 pre-defined screening strategies the share qualifies for.
Overall, it is an impressive site that brings a bunch of professional analytics to the retail investor at an affordable price. This said, I am not an advocate of adopting an entirely mechanical approach to investing. Personally, I prefer to understand the business strategy of each company I invest in. I favour companies with a clear, understandable and well-funded strategy, ideally with low debt and strong cashflow.
Going forward, I can see me using the Stockopedia analytics in two ways. Firstly, to highlight potential investment ideas via the screening tools before digging deeper into company strategy. Secondly, to provide an ongoing sanity check or early warning system into my investments (both prior to investing and to review shares that I continue to hold). At the very least, it will help me to understand how other professional and retail investors might be viewing my investments but additionally, I believe it will serve to highlight areas of potential concern that need to be researched or investigated further.
During 2014 I plan to write about several of strategies that I am studying, the stocks that qualify from…
