This is a combined value/momentum screen loosely based on the AAII "Value on the Move" screen and Jack Hough's "Impatient Value" screen in "Your Next Great Stock". It tries to uncover stocks that are bargain priced but avoid "value trap" stocks, which may languish for years until the market recognizes their “true” worth. Value and momentum investing styles might seem to have little in common but, in fact, research also indicates that momentum can be a catalyst to value. The screen looks for two attributes: A share price within 10% cent of its 52-week high (the momentum part of the equation), and a PEG ratio – price-earnings to growth – of less than 1.5 (the value part). The PEG ratio is simply the forward price-to-earnings multiple divided by the projected growth rate in earnings.
Your Next Great Stock: How to Screen the Market for Tomorrow's Top Performers
by Jack Hough
Jack Hough outlines this apporach in his excellent book, "Your Next Great Stock" (see link above). He cites the performance of the AAII equivalent screen, Value on the Move - this has seen a 13.6% return since inception (vs. 1.1% for the S&P 500).
This screen is based on a UK dataset.
It uses the following criteria:
Results are sorted by:
And limited to the first 200 Results
| Timeframe | Screen Returns | FTSE 100 | Outperformance |
|---|---|---|---|
| 1 week | -1.50% | -0.09% | -1.4% |
| 1 month | -3.96% | -5.34% | 1.4% |
| 3 months | 2.17% | -2.41% | 4.6% |
| 6 months | 20.65% | 6.90% | 13.8% |
| 1 year | 39.20% | 15.55% | 23.7% |
| Since inception | 36.07% | 18.0% | 18.1% |
| Annualised | 22.64% |
| Maximum Drawdown | -12.06% |
| Average No. of Holdings | 25 |
| Diversification Level | Good |
Chart based on an equal weighted portfolio of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.
Can't see the share you expect? View this screen as a checklist to find out why.
