Stock Screening Results - Mar 2019

With the recent cash from the sale of my M1 shares, I have to look for other dividend-paying stocks as replacement(s) to at least maintain and hopefully increase my portfolio yield.

So I turned to my best friend for help. Stock screeners.

Usually I used the StockFacts screener from SGX. However for this time I also tried Yahoo Finance screener for curiosity sake.

The criteria I set for the screen are as follows:

P/E Ratio: < 20

One of the most fundamental of valuation screeners. It is more meaningful if the PER is compared among companies in the same industry.

However in this case I usually set it to 20 as a rudimentary guard against overpaying.

Net Profit Margin: At least 10%

10% is the minimum margin in my opinion, for a company's sustainability.

Debt to Equity Ratio: < 50%

Obviously gearing is one of the most important metrics in terms of risk management. 50% is the most I can accept unless there are very good reasons for the high gearing.

Price to Book Value: < 1

I do not like to overpay for a stock. However having said that I have done it on a number of occasions usually due to a combination of other factors which paint an overall rosy picture of the stock. 

Dividend Yield: At least 5%

Ideally 5% is the minimum for my dividend stocks which is not too high honestly.

As you can see, the criteria I used are geared towards screening of income stocks suitable for my income portfolio. Not so much on growth or other value stocks.

Interestingly the result from Yahoo Finance screener is almost identical to that of SGX StockFacts screener except that the former includes one more counter in the screening result - Metro Holdings Ltd.

Here are the results.

                                                                         

Another interesting observation is that my previous screenings say 1 - 2 years back, almost always yield a 2 page long results.

However this time only 9 counters appear from the StockFacts screening.

Is the market worse or better than before? Or are most stocks overpriced now?

I think apart from the surface results from the screening, we can also delve deeper and we will be able to get a feel on the current market conditions.

Back to the screening results, I will do more due diligence into 1) Frasers Commercial Trust and 2) Sasseur REIT.

Stock Screening on a Wet Sunday

Feeling curious on a rainy Sunday, I decided to do my periodic stock screening which I have not done so for some time.

Using my usual screening criteria, the result actually surprised me this time.

I use the P/E, P/B, dividend yield, net profit and gearing in terms of debt/equity for my screenings.

P/E - Less than 10. However for today's screening I set it as 20 with reason given below.

P/B - Less than 1. Depending on the circumstances I usually do not want to over pay for my stock.

Dividend Yield - At least 4%. Above the risk-free interest rate from CPF.

Net Profit - At least 10%. I feel more comfortable with this figure as I feel there is more sustainability in the business.

Gearing - Less than 40%. Obviously I do not feel comfortable investing in a company with high debt level.

So with this set of screening criteria, I managed to get only 3 counters this time. These are:

1. Frasers Centrepoint Limited
2. Global Investments Limited
3. Keong Hong Holdings Limited

This is a far cry from the previous screenings where I usually get at least 10 - 20 results. If I set the P/E ratio to 10, Global Investments Limited will be out of the picture.

So what does this tells us about the current market?

Anyway for Frasers Centrepoint, it has always been in my watch list. I have no qualm in investing into this company once my TP hits.

For Global Investments, I have only recently started to read up on this company. Without more in-depth understanding I won't take any further action for now.

For Keong Hong, I have previously done some study here. It continues to be in my watch list.

With focus being on my new company now, I will probably be less active in the market unless good bargains appear.

Good luck everyone.