Screening Criteria

I use the following criteria for initial screening.  I sometimes deviate from this, but this is representative of the kinds of stocks that I usually wish to buy.  This is key fr two reasons.  I want the stocks to be good candidates for quick gains, but more importantly, I want them to be stable in case I have to hold them for the long run.

  • P/E Ratio <= 15 - Want good earners, look at forward and backwards P/E.
  • Market Cap > $15b - Large Cap
  • Div Yield between 2.5% and 6% - Not too low, as I want good payers, but not to high as I don't want risky dividends.
  • Operating Income > $0 - Positive earnings
  • EPS > $0 - Positive earnings
  • Book Value > $5/share - I don't want penny stocks unless the book value is significant,
  • 5 times interest coverage - Want to make sure that the debt burden isn't too great
  • Trading Volume over 100,000/day - This is actually quite low, perhaps this should be raised?

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