Screens and general fundamental analysis

[SStanford]

Hi All,

New to the board so please forgive me if the topic is posted in the wrong place!

I'm looking to invest in AIM and will be undertaking a substantial amount of fundamental analysis before I buy.

Initially I will be running a screen on all AIM constituents to identify value based on the following metrics:

[list=]1. Price-to-Earnings Ratio
2. Price-to-Book Ratio
3. Debt-Equity
4. Free Cash Flow
5. PEG Ratio
[/list]

The results will then be used for my shortlist, where I will be investigating the following metrics in much higher detail:

[list=]1. Earnings
2. Earnings Per Share
3. P/E Ratio
4. PEG Ratio
5. Dividend Yield
6. Debt/Equity Ratio
7. Book Value
8. Return on Equity (ROE)[/list]

Following this, all further analysis will be outside metrics into management, structure, sentiment, market share, competitive edge etc.

I'm having difficulty finding a comprehensive screen that compiles data from AIM, which screen does the reader find the most useful?

All the best.

[tjh290633]

You have tried the usual suspects, I assume?

DigitalLook is probably the place to start. Their screener should tell you a lot of that.

TJH

[SStanford]

You have tried the usual suspects, I assume?

DigitalLook is probably the place to start. Their screener should tell you a lot of that.

TJH

Many thanks tjh290633.

[torata]

Hi All,

New to the board so please forgive me if the topic is posted in the wrong place!

I'm looking to invest in AIM and will be undertaking a substantial amount of fundamental analysis before I buy.

Initially I will be running a screen on all AIM constituents to identify value based on the following metrics:

[list=]1. Price-to-Earnings Ratio
2. Price-to-Book Ratio
3. Debt-Equity
4. Free Cash Flow
5. PEG Ratio
[/list]

The results will then be used for my shortlist, where I will be investigating the following metrics in much higher detail:

[list=]1. Earnings
2. Earnings Per Share
3. P/E Ratio
4. PEG Ratio
5. Dividend Yield
6. Debt/Equity Ratio
7. Book Value
8. Return on Equity (ROE)[/list]

Following this, all further analysis will be outside metrics into management, structure, sentiment, market share, competitive edge etc.

Just putting this out there...
On the other place (TMF), an acronym SLINKY was used as a framework when presenting small cap shares as suggestions. You might not be considering sharing your ideas on the board for input from others, but it seemed a sensible framework to me to investigate shares, because it was wider than just financial ratios, IIRC.
Only problem is I can't remember what SLINKY stood for! Perhaps others may.

torata

[PinkDalek]

Just putting this out there...
On the other place (TMF), an acronym SLINKY was used as a framework when presenting small cap shares as suggestions. You might not be considering sharing your ideas on the board for input from others, but it seemed a sensible framework to me to investigate shares, because it was wider than just financial ratios, IIRC.
Only problem is I can't remember what SLINKY stood for! Perhaps others may.

torata

Small
Lowly rated
Improved trading conditions etc
Notifiable holdings
KKKs of cash
Yield

I cheated btw https://www.stockopedia.com/content/hay ... ck-184958/

[SStanford]

Hi All,

New to the board so please forgive me if the topic is posted in the wrong place!

I'm looking to invest in AIM and will be undertaking a substantial amount of fundamental analysis before I buy.

Initially I will be running a screen on all AIM constituents to identify value based on the following metrics:

[list=]1. Price-to-Earnings Ratio
2. Price-to-Book Ratio
3. Debt-Equity
4. Free Cash Flow
5. PEG Ratio
[/list]

The results will then be used for my shortlist, where I will be investigating the following metrics in much higher detail:

[list=]1. Earnings
2. Earnings Per Share
3. P/E Ratio
4. PEG Ratio
5. Dividend Yield
6. Debt/Equity Ratio
7. Book Value
8. Return on Equity (ROE)[/list]

Following this, all further analysis will be outside metrics into management, structure, sentiment, market share, competitive edge etc.

Just putting this out there...
On the other place (TMF), an acronym SLINKY was used as a framework when presenting small cap shares as suggestions. You might not be considering sharing your ideas on the board for input from others, but it seemed a sensible framework to me to investigate shares, because it was wider than just financial ratios, IIRC.
Only problem is I can't remember what SLINKY stood for! Perhaps others may.

torata

This is very useful, many thanks!

Having considered general success rates on Aim (72% of investors last money on the market etc, attempted to post my source here but I'm not allowed to add links) I've decided to focus on the more reliable midcap market ftse250.

Digital look is exactly what I was looking for. Does anyone have details on how reliable the figures quoted on the platform are? I can't seem to find source details on the site.

Based on the results produced by DL (if reliable!) I'll definitely come back to the board for opinions. If I think I've found a company with good fundamentals at a good price where would be best to post my findings?

S

[dspp]

Based on the results produced by DL (if reliable!) I'll definitely come back to the board for opinions. If I think I've found a company with good fundamentals at a good price where would be best to post my findings?

S

Digital Look is good. All such locations contain data errors.

Beware of screeners throwing up interesting stuff based on garbage numbers.

If you want to write up and discuss specific shares then try Share Ideas : viewforum.php?f=33

You may find it worth testing out your screener within a given sector, say groceries, to get a better feel for its responses. Otherwise you end up in an apples to oranges comparison of a gold mine with a grocer.

regards, dspp

[tjh290633]

Based on the results produced by DL (if reliable!) I'll definitely come back to the board for opinions. If I think I've found a company with good fundamentals at a good price where would be best to post my findings?

S

Digital Look is good. All such locations contain data errors.

Beware of screeners throwing up interesting stuff based on garbage numbers.

If you want to write up and discuss specific shares then try Share Ideas : viewforum.php?f=33

regards, dspp

Before you jump, it is always best to check with the company website, to make sure that the DL information is correct. It's not unknown for them to slip up.

TJH

[SStanford]

Thanks all for your input with this.

Can I ask; what metrics do people here generally use to identify potential growth companies?

I'm finding that I get very few results from the the parameters I outline above.


S.

[tjh290633]

Thanks all for your input with this.

Can I ask; what metrics do people here generally use to identify potential growth companies?

I'm finding that I get very few results from the the parameters I outline above.


S.

Not something that I do, but I would have thought that historical growth in earnings should be a good indication.

TJH

[SalvorHardin]

Thanks all for your input with this.

Can I ask; what metrics do people here generally use to identify potential growth companies?

I'm finding that I get very few results from the the parameters I outline above.

I generally rely upon the percentage growth over several years for the following three items:

1) Operating profit after tax - growing companies generally have rising profits year-on-year.

2) Earnings per share - watch out for exceptional items (and the distortion caused by buybacks).

3) Sales - rising sales without similarly rising profits can be a warning sign (company is having to discount its products). Though it could be that the company is concentrating on gaining market share and will then raise prices and/or reduce its costs later.

Companies which are consistently producing rising operating profits and earnings per share are worth investigating.

I completely ignore EBIT, EBITDA and all variations. These are useful for bond investors; for equity investors they are a scam designed to produce higher earnings per share. Berkshire Hathaway's Charlie Mugger calls EBITDA "BS earnings"

http://www.forbes.com/sites/brentbeshor ... 3820916070

Always check the company's accounts before you buy. Unfortunately third-party websites producing summarised data do make mistakes (particularly in including one-off exceptional items in the operating earnings per share).

That said my analysis focuses more on qualitative factors, in particular whether the company has a strong "moat" for its main products.

[dspp]

In answer to your question, the best potential growth companies generally have something that will not show up in the accounts, i.e. an asset that the customer has yet to start buying, and the market has yet to fully value. So all a screener can reliably do is compare & contrast equivalent companies in the same sector.

regards, dspp