A Look at Stock Rover

Stock Rover is as close to an all-in-one stop for stock information that I have seen. It has 2 separate sections that I refer to as the "Market" section and the "Stock Rover App" section. Both of these sections have a vast amount of useful underlying research information on the various stocks that make up the tradable stocks on the exchange. I will not be able to detail all of what you will find on this site. Just highlighting the areas that I find interesting will make for a long enough post. I can't stress enough that there is a ton of information under each tab and many more when hovering over some items or right clicking things like symbols.

You must register with Stock Rover. The registering is free and will give you access to everything I am talking about here. Premium membership is $250 per year. I don't think the Premium is necessary for most investors, especially smaller investors trying to learn. If you want to though they do have a 14 day free trial that you activate from the Stock Rover app menu with no credit card information required for the free trial. If you don't upgrade in the 14 days the app returns to the "free" version. Do not take this as an advertisement or recommendation, I have no affiliation and get no benefit from anyone subscribing.

Image 1 below is the main Markets page. I've highlighted a few things on here. Black menu bar at top is main sections and this shot is on Markets. On the Market section there is a lot to see. Notice the first set of tabs. It also is on Markets showing the performance of the overall indexes. Note that you can change the time frame to get up to one year performance. This tab also provides a lower table which is currently on Market Summary showing yet another table below that which is currently on Sectors. You can also change the time frame on sectors to get various views on strong sectors for whatever period you select. If you trade on the uptrends you want to use this to find which sectors are the best then drilling down into them to see what stocks are strong.

Notice the tabs along this table. In addition to Market Summary you have a Stocks, ETFs, Bonds, Commodities and Daily Analyst Ratings. Each of them has a summary for that day. Stock tab will show the largest movers for the day and top performers and top losers. Also note, the daily analyst tab shows companies that have been upgraded or downgraded for that day.

Image 1

Image 2 shows the screen that you get when staying on the Markets section (top black menu) but moving the first table down to "Quotes". Here, if you have no tickers entered you need to have one. This shot is looking at Oracle (ORCL). Note the table right under that is currently on Financials but you have a Details, Chart, News, and Peers in addition. I just wanted to highlight the Financials so you could see the fundamental data available here. By clicking the + mark in each line reveals the data for that item. It is currently on Financial Health. Note the data and graphs. On the left side if you click on the existing "X" it will remove that item from the graph. Clicking on the graph icon will add the item. You can have up to 4 items in the graph.

Image 2

In Image 3 we again stay in the Markets section (Black menu bar at top) but in the first table we clicked on "Ideas". Stock Rover keeps a few "featured screeners" to run without having to go into the Stock Rover app (image 4 below) I just want to point out that in the image below sitting just below the list of screened stocks is "Other Featured Screeners" Click on one of them for a different type of screen. The active screen shows the details of what is being screened to the left of the list of stocks. Also not you can access he CNBC Video Feed (Lower Right of Image 3)

Image 3

Lastly is Image 4 below which is the Stock Rover App. If you look on the images above it is located on the black menu bar at the top on the far right. Click the orange button "Launch SR" and it should open this up in a new tab or window depending on how you have your browser setting. This has just as many different places to explore as the "Markets" page so I won't try to get into too much detail here. I just want to highlight a few things. See the Start button (upper left of image 4)? Clicking that down arrow brings up a menu shown in Image 5 below. Look over the sections on this page. On the left side is the Market Summary, Quotes and Navigation. You simply have to click on the areas that I have highlighted in the Navigation section to see how really intensive this section is. As you highlight any of the stocks in the table in the middle (Research Tickers) It will populate the bottom chart and the right section labeled Insight for (symbol). Notice the grading system I highlighted in that box. Also note the tabs for additional details.

Image 4

Image 5 - Clicking arrow next to "Start" this is under the start menu

So this post just touches on the many features of this well laid out stock research website. I strongly recommend you spend a little time clicking through things here. As you click around in here you will probably come across some of the features only available to premium members but as of now it has not compelled me personally to pay for it. For me, I have another stock screening app that I am presently paying for that runs out in January of next year. At that time I might consider trying the premium. Lastly, below is a few links for more information about Stock Rover.

Compare features of Free vs Premium

https://www.stockrover.com/plans/compare/

Detailed Help for Stock Rover app (not Markets page)

https://www.stockrover.com/how-to/stock-rover-basics/right-click-menus/

17 page Getting Started Guide in PDF format for the Stock Rover app (not Markets page)

https://www.stockrover.com/library/pdf/getting-started-in-stock-rover.pdf

Created with Microsoft OneNote 2016.

What is the Top Down Style of Investing?

The idea behind top down investing is that in the S&P 500 it is divided into sectors and within each sector is a number of industries.  As the economy moves through it’s different cycles between expansion and contraction, certain industries become more attractive than others and they tend to attract more investors (more money flowing) into them.  This tends to make that sector outperform the S&P benchmark while those sectors out of favor will underperform the benchmark. 

The screen shot above is from my think or swim platform that allows me to look at the sectors by performance compared to SPY (S&P benchmark) Notice the columns on the right.  This one is sorted by 10 day performance and shows currently (mid July 2016) that Biotech (an industry) is out performing the SPY by about 3% in the past 10 trading days while Utilities (sector) is underperforming SPY by around 2%.  I use 10 day performance for short term trend trades and 3 month for intermediate term trends

The concept I learned is the saying that “a rising tide floats all boats” which means that most stocks within an outperforming industry will outperform the S&P.  This is usually indicated on the charts by an uptrend.  The length of the uptrend to look at depends on the type of investing you are doing.  If you are a short term investor the uptrend does not have to be months long.  If you are an intermediate term investor you want the uptrend to at least show a small rise in the 30 day moving average and pointing up.  It’s not an exact science and this method is only intended to give an investor an “edge” in picking up trending stocks.

So, with that in mind, in order to find stocks that meet top down style we can run a screen.  FinViz at http://finviz.com has a pretty decent free screener.  See the screen shot below.

You do not need to register with them to run screens but do need to register to save them.  It is free to register and is well worth the time to do so.  To save a screen after you have set it up, just click the down arrow in “My Presets” (upper left corner) and give it a name.  You can adjust this screen to suit yourself but the ones I use are highlighted in yellow.  I like a stock to be over $1 in price with an analyst recommendation of buy or better.  I also like average volume over 200,000 to insure I can get in and out of a trade quickly.  In order for a growth stock to grow, earnings need to be improving so I look for those that grew earnings by at least 10% this year and projected earnings growth of 10% next year.  Additional test on earnings is improving earnings and sales quarter to quarter.  I like to add the current ratio of over 1.5 because I like to know that a company can cover it’s current liabilities with it’s current assets.   I save this screen setup with the name of “TopDownInvesting(addSector)”  

With this criteria mentioned above, today I am getting 172 results.  But, I’m looking for strong sectors or industries.  So I need to add a criteria in one or both of the items marked in red in the above screenshot.   Materials is one of the strong sectors over the past 10 days so by changing the sector to Basic Materials (screenshot below) I get 7 results.

I can easily switch from one sector to the next to get the stronger stocks in any particular industry.  Adjusting any of the criteria up or down will of course change the number of results.  For example, if I changed Current Ratio to “Any”  I would get 13 results.  Any screener you use though is just that.  It’s a screener.  It does not say “buy me”.  You must look at and evaluate each stock before making a decision. 

Putting CEF Research to Work

After reviewing the articles I’ve posted over the past few days on what makes up a good CEF and things to watch for, it’s time to put it to work.  A good free resource for closed end funds is at http://cefconnect.com which has a very good fund screener along with extensive research information on each fund.  So first I have to start with a screen.  For this particular screen I’m going to focus on equity CEF’s and not bonds.  My personal reasons for this is that I am most familiar with stocks and my knowledge of the bond market is not great so I choose not to learn about them at this time. 

Screen info:

I selected equity type funds and also included specific sector focus to help add to diversification.

Above is the criteria I am screening for.  I want to limit the exposure of leverage to those funds with 30% or less leverage.  My distribution rate is set to range from 5% to 9%.  I don’t want less then 5% to get the most return for the amount invested to be worth the risk.  But, over 9% is chasing yield and most anything that pays out 10% or higher is doing so because something is wrong and typically they can not sustain such high payouts.  They are not worth the risk.  I selected monthly on my Distribution Frequency as a matter of personal taste.  I already have several stocks in my dividend portion that pay quarterly and I’d like to have some monthly income flowing in.  I selected under 0 for Discount / Premium as I do not want to pay more than 1.00 per 1.00 of assets.  I was not able to get the Z-Score into the screen shot but I did select a 1 year Z-Score of all under 0 to confirm that fundamentally the relative discount is a value at the current levels.

At the bottom of the screener a tally of the number of stocks is kept and changes on each selection you make.  This one got down to 9 funds based on my criteria.  Clicking on “View Funds” button will bring up the results.

So above is the 9 funds that pass the criteria I set in the screen.  Am I don yet?  No, not even close.  Next I will research each of the 9 funds.  I will look at several years of NAV discount/premium history and confirm that NAV is at least the same or not significantly lower than around 5 years ago.  I’ll also look at 5 years of distribution history for consistency in payments and most importantly how the distributions are being paid, watching out for use of return on capital.  Then I’ll look at the charts to see how the technical’s look for entry. 

Once I narrow that down to the 2 or 3 postions I am thinking of taking on, I’ll have to position size based on my earlier post about that topic and then take the plunge.

One point I want to make here is that this list of 9 funds are not a buy list and no one should act on these without doing their own due diligence.

A Look at Stock Rover

Alex Reisman of Stock Rover gives an overview of the online stock research platform.

At a glance:

• Online stock research software
• Screening, stock comparison & portfolio analysis
• Link to brokerage for automatic portfolio syncing
• Free & paid membership plans

Stock Rover is an interactive “dashboard” where you can engage in robust stock research. Stock Rover’s goal is to help individual investors make informed, independent decisions and to support them in their investing goals.

There are two membership levels: Basic (free) and Premium ($249.99/year or $74.99/quarter). Both levels provide detailed data on North American tickers, using the same integrated, comparison-oriented format. The major advantages that Premium offers over Basic are more financial metrics, 10 years of historical data rather than five, data export to offline CSV files, more flexible screening, deeper portfolio analysis, portfolio planning tools, and an ad-free environment. A 14-day free trial of Premium is available to all users (no payment information is needed; learn how to start the trial here).

Once you register for the FREE version and sign in you will go to a Summary page.  Look for an Orange button in the upper right corner of the page that says : “Launch SR” and click on that.  This will take you to the Stock Rover Basic application shown in the screen shot below.

The above screen shot is showing where the strong sectors of the overall S&P is right now.  You can sort by any of the columns.  Day traders want to see what's strong now.  Swing traders might want to see what’s strong over the past 5 days while trend traders or intermediate traders might look at the past month for strength.  Then you can drill down into the sectors to show what industries are strongest then drill into the industries for a list of stocks in that industry to see what particular companies are the strongest.  Once you select a company details of the stock show up using the tabs, side bar and comparisons highlighted in the screen shot below.

Good site well worth the time to register and learn how to use…

Value Investing Stock selection criterion

Here are a few value type criteria to screen for potential value stocks.  Use results for a watch list for further analysis before investing in any of the results.

Market cap

Market capitalization less than $5 billion - Lynch generally avoids large, well-known companies in favor of small-cap stocks that still contain significant upside potential. Most fund managers define small-caps as companies with market capitalizations under $1 billion. Institutional investors often use market one investment criterion, requiring, for example, that a company have a market capitalization of $100 million or more to qualify as an investment. Analysts look at market capitalization in relation to book value for an indication of how investors value a company’s future prospects.

PEG ratio < 1.2

PEG ratio below 1.2 – The PEG ratio is a valuation metric that compares a company’s price-earnings ratio with its projected growth rate. Small, high-growth stocks generally trade at higher PEGs compared to the big-caps. If the PEG ratio is around 1, the company is considered fairly valued. A PEG ratio that is much higher than 1 indicates an overvalued company, and a PEG below 1 indicates an undervalued company. While the PEG ratio can effectively provide insight in certain evaluations, it is limited by its overriding focus on earnings growth. Revenue growth, cash flow, dividends, debt, and numerous other factors are also critical in determining value. Additionally, while PEG is useful for smaller companies it may be misleading for big-caps, since sustained growth is less important to their total returns. PEG is most useful when supplementing a thorough discounted cash flow analysis or relative valuation.

Earnings growth 15–30%

Five-year earnings growth between 15% and 30% per year - In investments, earnings growth refers to the annual rate of growth of earnings, or the amount of profit a company produces during a specific period, usually defined as a quarter (three calendar months) or year. Earnings typically refer to after-tax net income.. When the dividend payout ratio is same, the dividend growth rate is equal to the earnings growth rate. Earnings growth rate is a key value that is needed when the DCF model, or the Gordon's model as used for stock valuation. Companies that exceed a 30 percent earnings growth rate are confronted with two fundamental problems: (1) sustaining a high growth-rate over the long term is extremely difficult; and (2) stocks growing that rapidly are usually already being actively covered by Wall Street analysts, and Lynch prefers less well-known names and avoiding competition.

Institutional ownership 5–65%

Institutional ownership ranging between 5% and 65% - Institutional investors are organizations that trade large volumes of securities. Percentage institutional ownership is the fraction of shares outstanding owned by mutual funds, pension plans and other institutional investors. Most well-known stocks have at least 40% institutional ownership. Usually more than 70% of daily trading on the New York Stock Exchange is from institutional investors. Peter Lynch, among many other investors, uses institutional ownership to gauge market interest. He believes stocks with low institutional ownership have the best return potential. When mainstream Wall Street analysts identify a stock, price growth can be dramatic with the support of institutional money. Lower levels can be associated with greater price volatility.

Return on Equity > 15%
Indicates high profitability and potentially a competitive advantage

Debt-to-Equity ratio < 0.5
Implies that the company does not heavily depend on outside capital to finance its growth

Current ratio > 2
Makes sure that the company is able to pay its short term obligations