Since A+ Investor’s launch earlier this year, the A+ Stock Grades and associated screener have been some of the service’s most popular features.
The A+ Stock Grades 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.
Not only do you get a letter grade for each of the five investment factors, but you can also see the percentile rankings of the underlying data points for each grade. Also, we provide a list of the company’s competitors and their letter grades. These grades are calculated and updated daily.
While you can review the A+ Stock Grades for specific companies, with the A+ Stock Grades Screener you can also identify stocks with particular letter grades across the A+ ratings on value, growth, momentum, estimate revisions and quality factors. To access the A+ Investor quant ratings screener for stocks, go to www.aaii.com/stockideas/quant.
At the top of the A+ Stock Grades Screener page, histograms (bar graphs) show the stock universe’s distribution across the letter grades for each of the five A+ ratings.
Furthermore, when you first visit the Grades Screener page, there is a table listing all of the companies in the A+ Investor stock universe (roughly 6,100 companies):
You can sort this table based on the company name and the grade or raw score for each of the five factor grades. You can toggle between ascending and descending order for any column by clicking on the up/down arrow icon in the column heading.
Let’s say, for example, you wanted to isolate only those stocks with value and momentum grades of A, and estimate revisions, growth and quality grades of C or better:
With data as of the close on October 16, 22 companies met these parameters. Here is a subset of those companies, ranked in descending order by Momentum Score:
This past week we rolled out several enhancements to the Stock Grades Screener that allow A+ Investor subscribers to filter against specific groups of companies—user portfolios, passing company lists from the AAII Stock Screens and specific sectors or industries:
As you can see, we have added drop-down menus at the bottom of the image above where you can select portfolios, screens and a specific sector or industry.
If you want to see the grades of the stock holdings in a portfolio you have created using the My Portfolio tool, click the Load Portfolio button. This will bring up a list of all the portfolios you have created with the My Portfolio tool. Click the blue Select button for the portfolio you wish to analyze and the stocks in that portfolio will be loaded into the data table. Here, I have loaded my “My Portfolio” portfolio, which has 11 stock tickers:
Not only can I see the grades and scores for the five Stock Grades factors, but I can now filter these tickers based on their various A+ Stock Grades. I was interested to see how many of these 11 stocks have A+ Stock Grades of C or better, and found that only two meet these requirements:
Another of the enhancements we have made to the Stock Grades Screener is the ability to filter the companies passing any of AAII’s Stock Screens. You can run these filters against the latest set of passing companies as of the close of the previous trading day.
So, for example, by clicking the Load Screens button, I can select the John Neff screen. But first, I need to reset the companies I am analyzing, so I click the Reset button. Doing so “unloads” any portfolio, screen passing companies and sector/industry combination, as well as any grade filters I may have set up previously. Clicking Reset will return me to the full universe of stocks in the A+ Investor database.
After clicking Reset and selecting Load Screens, I am presented with the list of AAII Stock Screens (the image below is only a subset of the 60+ screening strategies AAII tracks):
Clicking the blue Select button next to Neff screen loads the 20 companies that passed the AAII Neff screen as of October 16. Here are 10 of the 20:
While the Neff screen is what some may call a “growth at a reasonable price screen,” in that its primary filter is the dividend-adjusted PEG ratio, it only uses one value metric. The A+ Value Grade is a composite of several value measures: price to sales, price to earnings, enterprise value to EBITDA (EV/EBITDA), shareholder yield, price to book and price to free cash flow.
So to capture stocks passing the Neff screen that perhaps have more true value, I adjusted the Value filter to only allow those passing tickers with a Value Grade of B or better. I am also interested in stocks exhibiting at least average price momentum, so I adjusted the Momentum Grade filter to only allow those passing companies with Momentum Grades of C or better. Lastly, I required that the Quality Grade be at least a B, leaving me with five of the original 20 Neff passing stocks as of October 16:
Another enhancement is that you are now able to run Stock Grade screens against companies in a specific sector and/or industry using the Sector and Industry drop-down menus on the Grades Screener page.
Let’s start with the currently popular technology stocks (but first, I clicked the Reset button to start fresh).
As of October 16, 1,009 stocks are designated as being in the technology sector by The Refinitiv Business Classifications (TRBC).
With technology being on such a tear for most of this year, I am interested in those tech stocks with some level of value, so I first require a Value Grade of B or better. This quickly cut the number of companies down to 222, with data as of October 16. As a “value on the move” investor, I also required that the Momentum Grade be B or better, leaving 60 companies. To weed out companies of questionable quality, I also required a Quality Grade of B or better, which left 18 companies. Lastly, I required average-or-better Growth and Revisions Grades. These filters reduced the technology stock universe to eight companies from the initial 1,009:
If I wanted to narrow my analysis within the technology sector, I could have selected an industry within that sector from the Industry drop-down menu:
One of the many hats I wear at AAII is that of the head of product development. That means I am always looking to create valuable and useful products and services for AAII members and enhance current products. These new enhancements for A+ Investor were based on user feedback and comments, which play a pivotal role in the projects we work on here at the association. I always welcome feedback and comments. While we may not always make the changes you suggest, rest assured we are listening and do everything we can to make the most meaningful improvements possible. So, as always, I am interested in hearing your feedback regarding these latest enhancements to A+ Investor as well as areas that we can improve. Feel free to pass along your comments to me directly at wayne@aaii.com.
