The First Cut for stocks this issue lists those that passed the greatest number of screens tracked by AAII at the Stocks area of AAII.com. This process is accomplished by examining the results of every stock screen and identifying stocks passing more than one strategy. As of March 13, 2020, 928 stocks passed at least one of the stock screens tracked by AAII, but only 17 stocks passed four or more screens and they are the ones that made the stock’s First Cut this month. Note that some screens—such as the small-cap-focused Foolish Small Cap 8 screen and the price-momentum-driven O’Neil CAN SLIM screen—did not have any companies that passed at the time of the analysis.

The stocks are ranked by how close their current price relates to their 52-week high price. With the dramatic market downturn, some companies had bigger declines, and these stocks would be toward the bottom of the table.

The table lists the price-earnings ratio (price divided by trailing earnings per share) as a basic valuation measure. The annual earnings growth rate provides a simple historical indication of the bottom-line company performance over the last year and three years. The market capitalization (number of shares outstanding times the share price) is a common way to measure the size of a firm.

While you cannot automatically consider a group of consensus stocks to be a diversified portfolio, they may present a good First Cut for constructing your personal portfolio. Optimally, the group of screening approaches a stock passes is diverse enough to capture unique, yet desirable qualities. Further information on each of the screening strategies can be found at the Stocks area of AAII.com.

Related

Feature

2019 Screening Strategy Review: Stocks End Decade on High Note