Last week we launched a redesigned home page for AAII.com. The new design, which will continue to evolve in the coming weeks and months, highlights AAII’s useful content and directs you to areas of the site designed to help you become a better investor.
One of the more popular features of A+ Investor is the Stock Grades. This system is a grading tool based on percentile rankings of multiple key metrics within five investment factors: value, growth, momentum, EPS estimate revisions and quality. They represent a summary of a company’s fundamentals and give you a quick overview of how a stock rates based on the five investment factors that have been shown to produce market-beating results.
A recent enhancement to the Stocks area of AAII.com is the calculation of aggregate stock grades for all of the AAII Stock Screens.
To access the complete list of all the stock screens AAII has developed and tracked, select the “Explore All Screens” from the Stocks drop-down menu on AAII.com:
The link will take you the All Screens view, with a table listing the 60-plus stock screening strategies AAII tracks:
By default, the All Screens list displays the Performance tab with various periodic performance stats for all the stock screens AAII tracks. You can sort the table by any of the performance columns. In addition, the Factors column indicates the underlying characteristics of the various screens. For example, the Philip Fisher screen, which is up 64.6% for 2020 through the end of June, uses filters identified with value (V) and growth (G) investing. The screen requires a company to have net profit margins that are better than its industry median for the trailing 12 months and each of the last five fiscal years, rising sales over each of the last three fiscal years as well as compound average growth in sales over the last three years that exceeds the industry median. On the value side, the screen looks for companies with a price-earnings-to-growth (PEG) ratio between 0.1 and 0.5.
New to this table is the Grades tab:
This table shows the average grades for each AAII stock screen based on the companies that currently meet the screen’s criteria. The passing companies and average screen grades are updated daily through the previous trading day’s close (for A+ Investor and Stock Investor Pro subscribers only).
Clicking on the down arrow to the right of each screen name will show you the companies currently passing the screen, their individual A+ Stock Grades and their sector, as defined by Thomson Reuters Business Classification (TRBC). For example, as of the close on July 17, 2020, three stocks passed the David Dreman screen:
Based on the A+ Stock Grades for these three companies, the Dreman screen grades are:
By providing the average A+ Stock Grades for all of the stock screens, you get a clear picture of the types of stocks that pass each screen. This, in turn, will help you decide whether a given strategy fits your own investment philosophy. If you gravitate more toward value stocks, you may not be interested in stock screens where the average A+ Value Grades are consistently D’s or F’s. Likewise, growth investors may want to look past those screens with low average A+ Growth Grades.
