First phase / Fundamental market screening for quality stocks
- Market capitalization 2 to 10 billion dollars
- Price above 10$ per share
- Average daily trading volume over 200k
- EPS growth over the last 5 years greater than 5%
- Revenue growth over the last 5 years greater than 5%
- ROI Return on investment above 5%
- ROE Return on equity above 10%
- Quick ratio over 1
- Debt to equity below 1
This currently leaves 48 Companies that have cleared my first hurdle
Second phase / view charts on a weekly basis
Since I'm familiar with trend trading, I also try to trade these. What is important to me?
- Recognizing trends on a weekly basis
- Stocks that are on the move are put on an extra "waiting watchlist"
- I only enter stocks during corrections
- At least 30% performance to the last all-time high from the time of entry
- Nice to have but not decisive --> The price is quoted above the EMA 200 (weekly basis)
- Nice to have but I am not decisive --> Rising volume in recent months
Example screenshot from $APPF (+5.68%)
After screening with the eye, perhaps the following remained 15 stocks that are in correction in their current market phase.
Third phase / Include analyst ratings
- I look at what the analysts say about the stocks
- Stocks that are rated HOLD / SELL / STRONG SELL are immediately removed from the watchlist
- BUY and STRONG BUY are then clearly the favorites
- Here, however, we also look at how many analysts have given a rating --> If there are too few, it can distort the result
After the analyst ratings, approx. 12 shares remained
Phase four / Dealing with the company
This is the first time I look at what the company actually does.
- How are they positioned.
- What is their core competence?
- Who are their competitors
- Where do they operate
- Who can I convince
And the most important... Which companies can I imagine will continue to grow in the future and remain on the market for as long as possible?
I am grateful for every exchange. If anyone has any ideas, additions, experiences or food for thought for me, please let me know.
--> The only thing I won't deviate from one hundred percent is the entry from the correction 😁
@Multibagger I hope I was able to give you an insight? There are of course a few more (interesting stocks for me) on the watchlist, but these are the ones that convinced me the most according to all my criteria. Let's take a look?
As I said, this is my first foray into the mid-cap sector.
Best regards
