There have been gusts of turbulence in 2023, but stocks have made their way to clearer skies. Consider this: The S&P 500 is trading near 4,400 as of late June, versus 3,675 this time last year and 3,839 at the start of the year. The new bull market took flight despite an earnings recession, a Fed that remains somewhat hawkish on rates (although they did take a pause in June), and a relative lack of breadth for the stock rally (with big tech responsible for much of the market’s gains).
If you think the bullish momentum for stocks could continue, and are looking for new investing ideas to consider, you might explore some of the most popular screens on Fidelity.com, which can be found within the Stock Screener labeled “Most Popular” under the “Strategies” tab.
Big Buys/Best Bargains
One way to set up a stock filter is to start with a list that is narrowed down in some way. The Big Buys/Best Bargains screen from Zacks Investment Research begins with only those stocks that are a Zacks Buy Recommendation. That list is then further pared down to look for stocks with a growth rate above the median rate for the market as well as those with a valuation that are below market.
This screen filters for stocks with a positive price-to-book ratio of less than 2.00, a positive price-to-sales ratio of less than 1.50, earnings-per-share growth (projected this year vs. last year) above 15%, 90-day average volume of 50,000 to 145.59 million, and a stock price of at least $5.00.
Here are the top 5 results of this screen, sorted by market cap, as of June 22, 2023:
- Brookfield (
) - Volkswagen (
) - Tokio Marine (
) - BASF (
) - American International Group (
)
Part of the process when evaluating the output of a screen is to think about if the results are in line with what you might expect. Do they appear to align with your objectives? Are there any results that seem strange? If the output generally seems unsuitable for your goals and risk tolerance in any way, you may want to consider adjusting the filters or running a different screen.
Stocks according to GARP (modified)
This screen from Recognia follows one of the oldest and most widely followed value investing strategies—growth at a reasonable price (GARP). As described by famed investor Benjamin Graham, this screen starts with companies that have consistently paid dividends over time.
It also filters using a price-to-earnings ratio (trailing 12 months) under 15, a price-to-book ratio under 4.5, EPS growth (5-year historical) between 3% and 262%, revenue (trailing 12 months) between $400 million and $622 billion, and a current ratio (most recent quarter) over 2.
Here are the top 5 results of this screen, sorted by market cap, as of June 22, 2023:
- EOG Resources (
) - STMicroelectronics (
) - Nucor (
) - Cognizant Technology (
) - Agnico Eagle Mines (
)
It’s worth noting that most of the results of this list are in the materials sector. A consideration when adding individual stocks to your portfolio is concentration risk within a particular sector or industry. Concentration risk is essentially putting your eggs in a single basket—if you are not diversified across the rest of your investments.
Bull Ride – Short Term
In addition to screening by fundamentals like value and growth, you can also run screens that use short-term pattern-based filters. One of the most popular screens in the Fidelity Stock Screener is the Bull Ride – Short Term from Recognia.
This screen looks for stocks with a security price over $4.00, volume (10-day average) between 100,000 and 166 million, % price change today, highest 20% volume (today/10-day average), and any bullish short-term pattern.
Here are the top 5 results of this screen, sorted by market cap, as of June 22, 2023:
- Digital Realty Trust (
) - Molina Healthcare (
) - Brookfield Infrastructure (
) - Cyberark Software (
) - Ameresco (
)
It is important you understand and are comfortable with the risk of any investment that you are considering. For example, the results of this screen are companies that are relatively smaller in size. Smaller-cap companies are inherently more risky than large caps, so results like this may require a little extra due diligence.
What’s next after running a screen?
More research is needed to determine if any of these investments are right for you. You should fully understand the risks involved, and each investing opportunity should be considered within the context of a well-diversified investment strategy that conforms to your specific time horizon, objectives, and risk parameters.