Messages: What Members Are Asking On-Line

Is the stock screen that is featured in ads by Investor’s Business Daily available to AAII members?

—D. M.
via E-mail

CI Editors respond: A number of advertisements by Investor’s Business Daily (IBD) make reference to results from our ongoing study of stock strategies. We have been testing the performance of a wide range of stock strategies built into Stock Investor Pro, AAII’s stock screening and fundamental analysis software program, for a number of years.

The IBD ads refer to Stock Investor Pro’s implementation of the William O’Neil CAN SLIM system developed using the rules presented in the second edition of William O’Neil’s book “How to Make Money in Stocks: A Winning System in Good Times or Bad,” (McGraw-Hill Trade). The CAN SLIM approach has proven to be one the most consistent and strongest-performing screens during both bull and bear markets. The AAII Journal reports on the performance of all strategies tracked by AAII twice each year.

Members wishing to examine the companies passing the CAN SLIM screen will find them posted on AAII.com or can run the actual screen in Stock Investor Pro.

To access the CAN SLIM screen on AAII.com, members will need to first click on the AAII Stock Screens link found under Portfolios in the navigation bar along the left side of the AAII.com home page.

The first page of the Stock Screens segment of AAII.com normally highlights a single screening strategy on a rotating basis. For example, the low price-to-sales strategy was the highlighted screen for September. To view the other 50-plus screens tracked by AAII, you should click on the All Screens button on the upper right-hand side of the Stock Screens area to go the screening archive.

The stock screens archive area divides the screens into five categories:

• Value,
• Growth & Value,
• Growth,
• Specialty, and
• Small Cap.

There are two CAN SLIM approaches presented under the growth category—O’Neil’s CAN SLIM and O’Neil’s CAN SLIM Revised. The original approach, based upon the second edition of his book, focused on strong current quarterly earnings growth, strong and consistent annual earnings growth, new highs, limited stock supply, leading companies, institutional sponsorship, and overall market direction. When O’Neil published the third edition of “How to Make Money in Stocks,” he changed a number of CAN SLIM criteria and these revisions are reflected in our revised CAN SLIM screen. The March/April 2003 issue of Computerized Investing as well as the April 2003 issue of the AAII Journal detailed the revised criteria and compared the two screens.

CANSLIM Screen CLICK ON IMAGE TO SEE FULL SIZE.

The presentation of all of the approaches on AAII.com includes an article explaining the theory and philosophy behind each approach and how we designed a set of quantitative filters to find companies that exhibit these desirable qualities. Screening articles are normally broken down into four parts—each part can be accessed through links along the right-hand side of the page. A separate page lists the exact screening criteria used in Stock Investor Pro to perform the screen.

A box labeled “Screen Results” provides links to the passing companies and a performance chart. The passing companies link takes users to a table listing the stocks passing the screen for the current month, along with some basic fundamental data for each stock and a link for further information. The performance chart provides a graphical figure showing the cumulative performance of each screen along with a benchmark index such as the S&P 500; charts are updated on a monthly basis.

The passing companies table and performance chart for each of the nearly 60 strategies tracked by AAII are updated monthly. It takes time to process, format and post all of these tables, but updated information is normally posted by the middle of each month.

Members who want quicker access to the list of passing companies can run most of the screens presented within the Stock Screens area using Stock Investor Pro. This stock screening and analysis program costs $198 per year and includes monthly CD-ROM updates sent out via mail and weekly updates that can be downloaded from AAII.com. Most of the screening strategies are pre-programmed in the software. Further information on Stock Investor Pro can be found in the Store area of AAII.com.