AAII Stock Ideas

Our Stock Ideas area provides you with access to a wide range of stock strategies and investment ideas. They cover more than 50 stock investment strategies.

Some stock screen approaches follow the methods of well-known professionals (like Warren Buffett or Peter Lynch) and allow you to implement their styles of investing. Other approaches implement time-tested techniques used to identify attractive stocks. Some approaches are geared toward large-company stocks, while others uncover micro-cap firms. There are even a number of specialty screens that attempt to gauge the stock selection impact of a single variable, such as earnings estimate revisions. Needless to say, the characteristics of the stock investment approaches we track on AAII.com vary widely. 

Getting Started

AAII closely tracks the results of our stock screening approaches. Every month, we run all 50+ screens. The results are pulled from our powerful fundamental stock screening and research database program Stock Investor Pro, which was developed in-house by AAII.

Keep in mind that these are stock screening approaches and not actual portfolios. To calculate the results, companies passing a screen at the end of a month are “held” for one month and then “sold.” The process is repeated each month, with screens reapplied using each subsequent month's data. Stocks matching the screen's initial buy criteria are retained, while stocks no longer passing are removed. (In an actual portfolio, stocks may be held for a far longer period of time, especially if they continue to exhibit characteristics the strategy seeks even if they no longer pass the initial screen.)

What Works Best

Before making any judgments concerning which screening approaches work best, we recommend that you look at the long-term returns as well as recent performance. The rules of each screening strategy are defined by our interpretations of these investment approaches. Furthermore, the performance we report is based on hypothetical portfolios and does not reflect the impact of commissions and bid-ask spreads. The criteria, or rules, used to generate the list of passing companies are presented for each strategy. That being said, AAII's stock screening approach results are quite impressive.

This chart lists the 10 top-performing stock screens over the last 12 months. In addition, the list includes the screen's three-, five- and 10-year annual and cumulative returns. For comparison, we also included the price performance of the S&P 500 over the various time periods.

If you want to examine the numbers or learn more about this important area of AAII.com, I would encourage you to use the links provided below.

Helpful Links

The following links point to the most important features of the Stock Ideas area on AAII.com.

 

All Screens

This allows you to see all of our 50+ stock screening approaches on one convenient page. You can review year-to-date and total performance since inception for each screen. Click on any screen name to access additional data, along with an overview of the screen and list of its criteria.

Tabs above the All Screens table take you to more in-dept data. Each table can be printed or downloaded

• Risk & Return: This table gives risk stats for each screen, including risk index, risk-adjusted return, best and worst month returns, and most recent bull market and bear market returns.
• Yearly Performance: This table provides annual return data for each screening approach we track. 
• Characteristics: A snapshot of the fundamental and price characteristics of stocks passing each screen is presented. This table provides a quantitative overview of the type of stocks passing each screen. Fundamental data includes average valuation ratios, yield and earnings growth. Price data includes company size and relative performance.
• Grades: This tables shows each screen's A+ Investor Scores and Grades for value, growth, momentum, earnings estimates revisions and quality
• Power Rankings: This table allows you to rank the screens on the performance period of your choice.

 

Annual Stock Ideas Review

Each year, the AAII editorial staff provides an annual wrap-up of the performance of each screen as well as a detailed look at what worked well and what didn't over the past year. This annual review is a must-read if you are interested in learning more about stock screening.

 

FAQs Page

The Stock Ideas FAQs page includes answers to many popular questions received from AAII members. This includes questions about rebalancing, calculations of total returns, sell rules and more.

 

Constructing Winning Stock Screens

This description of the stock screening process illustrates how to design or select a stock screen that makes practical sense.

 

Conclusion

Keep in mind that the screening strategies presented on AAII.com are our own interpretations of the investment approaches advocated by numerous strategists. While we have attempted to illustrate a practical set of rules for each approach, the screens are only the first step. We recommend that you use them to generate an initial list of potential investments that merit further research.

Most importantly, remember that screening is just a first step. There are qualitative elements that cannot be captured effectively by the quantitative screening process we present. Detailed fundamental analysis of any stock you are considering for purchase is necessary for successful investing.

To get started using AAII stock screening approaches, take a moment to visit the Stock Ideas area today.