Stock Picks – 52 Week Low Screen

The premium stock screener at Morningstar is down – very frustrating – had to do this screen the hard way!

Click on the links to research further.

Retail is still getting crushed – Home Depot (HD) beat on earnings and revenue yesterday – and still went down:

• IBD – Home Depot Earnings Beat On Higher Sales, But Stock Falls

Great company – but like much of this current market, drastically overvalued.  A retailer should not be sporting a current PE Ratio over 24!

You may wonder why the Gap (GPS) is no longer making it into this screen – especially since it is now trading at a new 52 Week Low. Simple answer – its situation has deteriorated and no longer passes the financial grade hurdle.  I never mess with companies that have money problems.

52 Week Low stock picks are based on the following screen:

1. Morningstar analysis available.
2. Less than 5% above its 52 week low.
3. Greater than or equal to Narrow moat.
4. Free cash flow/enterprise value greater than 5% (should be above what the 10 Year Treasury Bond is yielding).
5. Financial Health Grade >= B.
6. Forward P/E <= 20.
7. Stock Industry not = Asset Management
8. Dividend Yield % >= 3
9. For candidates that have passed all the filters, review the individual stocks Return on Invested Capital (ROIC) for the previous 10 years to select the best long term candidates.