Saturday, May 24, 2008

* You Can't Beat the Herd by Following the Herd

"You can't beat the herd by following the herd." If you have read this blog for any period of time you have likely seen me use the above statement.


As noted in "Fishing in the Bathtub", the S&P 500 Dividend Aristocrats and Mergent's Broad Dividend Achievers are two places I frequent when looking for potential dividend investments, as do most all dividend investors. But for my more risky higher-return dividend investments, I have to look elsewhere. One of these places is the MSN Stock Screener.

This allows me to define the minimum parameters that I am looking for and let the stock screener search the entire universe of available stocks for a match. I have found MSN Tools to be the most robust and capable on the Internet. Here are some of the items you can consider when running a MSN Stock Screen:

Company Basics: Includes Industry Name, Market Capitalization, Total Shares Outstanding, Number of Employees, Dow Jones Membership, S&P Index Membership, Exchange and State

Investment Return: Includes Return on Equity, Industry Average Return on Equity, Return on Invested Capital, Return on Assets, ROE: 5-Year Avg., ROI: 5-Year Avg. and ROA: 5-Year Avg.

Price Ratios: Includes Price/Book Value, Industry Average Price/Book Value, Revenue/Share, Book Value/Share, P/E Ratio: Current, +12 others

Mgmt. Efficiency: Includes Revenue Per Employee, Income Per Employee, Receivable Turnover, Inventory Turnover, +3 more

Financial Condition: Includes Debt To Equity Ratio, Current Ratio, Quick Ratio, Interest Coverage, +4 More

Dividends: Includes Latest Dividend Rate, Current Dividend Yield, Div. Yield: 5-Year Avg., +3 more

Trading & Volume: Includes Last Volume, Net Insider Transactions, 3-Month Relative Strength, +14 more

Growth Rates: Includes Annual EPS Growth Rate, 5-Year Dividend Growth, EPS Growth Year vs Year, +7 more

Stock Price History: Includes Previous Day's Closing Price, Last Price, % Change Today, +12 more

Profit Margins: Includes Net Profit Margin, Gross Margin, Pre-Tax Margin, +7 more

Current Financials: Includes 12-Month Revenue, 12-Month Income: Cont. Ops., Latest Fiscal EPS, +3 more

Analysts Projections: Includes Current QTR Earnings Est, Current Yr Earnings Est, Mean Recommendation, +7 more

Advisor FYI: Includes 59 events in which an Advisor is issued such as a Stock Split, Receivables Up, Inventory Turn Increased, etc.

StockScouter Rating: Includes Rating, Size, Sector, Rick Expectation, Return Expectation, +8 more

As you can see this is a powerful tool. Next week I will share with you a stock screen that helped me identify some exceptional stocks, and got me into some trouble.


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