Guides, by Kurt Kowitz, Chief Geek
Posted on December 31st, 2011
This article covers screening criteria and the basic steps required to screen stocks at Manifest Investing.
To search for stocks using Manifest Investing, click on StockSearch on the top navigation bar of the site.
The instructions, while basic, cover how screening works at Manifest Investing. You can use any of the criteria listed on the page to limit your results.
MIPAR is the median projected annual return (PAR) for all stocks followed by MANIFEST (MI). MIPAR’s fluctuating value sets the Sweet Spot, the target range for PAR, 5-10% above MIPAR.
On the date of the screen shot used for this example, with MIPAR at 20.8%, our target range (Sweet Spot) would be 25.8% to 30.8% for PAR.
Further reading: Pendulums and Projections
Select specific sectors or industries to screen on, or hold the CTRL key or Apple key to select multiple Sectors or Industries. Typically, you’d want to use one or the other, not a Sector and Industry selection at the same time.
Projected Annual Return, PAR, is the sum of the forecast price appreciation and the projected dividend yield.
Price appreciation is the annualized change between the current price and a projected price five years from now.
The future price is projected based on current sales, a sales growth forecast, projected net margins and average P/E ratios.
A typical value or range for PAR would be a low and high that match the Sweet Spot listed above, so, for this example, a low of 25.8% and a high value of 30.8%.
Quality is a measure of the excellence that characterizes a company in the marketplace. The MANIFEST quality rating ranges from 0-to-100 and is built from four major characteristics: financial strength, earnings stability, relative sales growth and relative profitability.
Further reading: Quality: Excellence Measured
A typical value or range for Quality would be 65 or greater, which would listed companies considered of excellent quality in our database.
Financial Strength is a measure of the company’s financial condition and takes into account a lot of the same information used by major credit agencies, for example, net income, cash flow, outstanding debt and the outlook for profit.
Our consensus ranking takes various sources and combines them, then ranks them based on the the scores for all companies in our database. The figure ranges from 0-to-100, from the lowest to the highest financial strength when compared to all tracked companies.
A typical range or value for Financial Strength would be a low of 80.
The growth forecast is the five year forecast for a company’s sales growth. For an overall portfolio, a rate of 10-14% would be a logical target range. For screening, the Growth Forecast can be used to target company size. The growth forecast for large companies will be lower than those for small companies.
A typical range or value for Growth would be a minimum of 10%.
EPS Stability is a ranking of the average annual variability in earnings per share growth for all stocks in the Solomon database. The figure ranges from 0-to-100, from the least consistent to the most consistent EPS growth track records.
Further reading: Unlocking the EPS Stability Code
A typical value or range for EPS Stability would be a minimum of 65, providing companies that have very stable earnings per share growth.
The projected yield shows how much a company pays out in dividends each year relative to its share price. Screening on a higher minimum yield would find companies that provide a steady stream of cash flow from an investment.
If you’re hunting for companies that provide a dividend, a typical range for Projected Yield might be .5 for a low value and 5 for a high value.
CAPS is a stock picking community sponsored by the Motley Fools. The premise is simple: Working together, we can improve our investing results. This service pools the resources of the Foolish Community to help you to identify the best stocks at the best times to buy them — and which stocks to avoid, too.
CAPS allows users to provide a rating of 1-to-5 stars for all companies they track. This user defined rating can be used as a cross-reference to quality.
A typical minimum value for CAPS Stars would be 4 or 5.
CASPI stands for CAPS All-Star Performance Index. The participants at CAPS predict whether stocks will outperform and underperform the S&P 500. Players are scored and ranked. The top 20% of all players are dubbed All-Stars. We track the number of All-Star outperform ratings vs. underperform ratings to form the CASPI rating.
The median value on this index is fairly high, near 90%. A typical value for CASPI would be a minimum of 90-95 or higher.
With the values defined, we can move on to a few screening examples.
For the first pass, I’ll only use PAR and Quality:
A click on Show Results provides a long list, with 63 results, however, I’ve trimmed the bulk of them out for a shorter display:
To trim the list further, I’ll click on Change Criteria and add additional search criteria:
I’ve added high Financial Strength, a minimum for Growth and high Earnings Stability to the screen and the result is a much shorter list of candidates for further study:
Adding a high CAPS Stars value of 4 or 5 and a CASPI minimum of 95 would likely limit the results to only 1 or 2 candidates.