How to Screen Stocks for Long-Term Success

TL;DR

To successfully screen stocks for long-term investment, combine fundamental analysis, focusing on accelerating earnings, revenue, and margins, with technical analysis to identify trends. Look for companies with unique qualities that differentiate them from competitors and consider stocks above their 50-day moving average, preferably buying during market weakness within an uptrend.

Transcript

[Applause] but as far as running screens i i run my own screens they're a combination of technical and fundamentals because i don't even want to consider a stock i don't believe in fundamentally so um so typically when i'm screening there's going to be some something fundamentally that gives me confidence because if i don't have um you know confide... Read More

Key Insights

• 🔇 The speaker's stock screening process combines fundamental and technical analysis to gain confidence in a stock's potential.
• ⌛ Fundamental criteria such as earnings, sales, and margins accelerating over time are important indicators for the speaker.
• 💪 The speaker looks for stocks with unique qualities and a strong competitive edge for long-term investment.
• 🔊 Technical factors, including trading above the 50-day moving average and proximity to new highs, play a role in the speaker's stock selection.
• 🔇 The speaker focuses on buying weakness within the context of an uptrend for entry opportunities.
• 🔇 In the current market, the speaker gravitates towards the reopening trade where fundamentals may not be the primary consideration.
• ⚾ Turnaround screens, which are primarily technically based, are used for some trades.

Questions & Answers

Q: How does the speaker combine fundamental and technical analysis when screening stocks?

The speaker starts with basic fundamental criteria such as earnings, sales, and margin acceleration. Once they have conviction in the fundamental story, they apply technical analysis to identify entry points based on trends and support/resistance levels.

Q: What are the key fundamental criteria the speaker looks for in growth-oriented stocks?

The speaker looks for accelerating earnings, revenue, and margins over multiple quarters. They also consider return on equity as an additional measure of a company's performance.

Q: How does the speaker identify stocks with long-term potential?

The speaker emphasizes the importance of finding companies that have something unique or special that differentiates them from competitors. They believe that identifying this quality is crucial for long-term success.

Q: What technical criteria does the speaker consider when selecting stocks?

The speaker prefers stocks that are trading above the 50-day moving average, where the moving average is trending up. They also look for stocks near new highs and seek opportunities to enter either on breakout or pullback scenarios.

Summary & Key Takeaways

• The speaker uses a combination of fundamental and technical analysis when screening stocks.

• They focus on fundamentals that show improving earnings, revenue, and margins.

• For long-term investments, they prioritize finding companies with unique qualities that differentiate them from competitors.