Sweet 16 Screen (May 2013)

In Search of High-Quality Stocks On Sale

The screening results shown here represent the survivors of a screen based on a projected annual return in the Sweet Spot, an excellent Quality Ranking, leadership financial strength and EPS stability and a dash of Motley Fool CAPS positive sentiment.

Overall Market Expectations

Mipar 20130430

The median projected annual return (MIPAR) for all 2400+ stocks followed by MANIFEST (Solomon database) is 6.6% (4/30/2013). The multi-decade range for this indicator is 0-20% and an average reading since 1999 is 8.5%.

Companies of Interest

With the median return forecast hovering at 6.6%, less than the historical average and nearing historical lows, it still makes sense to shop amongst the highest quality companies.

This month’s Sweet 16 provides a smorgasbord of companies that keep making appearance on a variety of our screening efforts, model portfolios and/or educational webcasts.

Techne (TECH) may be among the fundamental analysis leaders but the technical indicators (including sluggish momentum) are weak. The stock was recently dumped (sold) by the Motley Fool’s flagship newsletter, Stock Advisor. Study carefully.

The French integrated energy company Total (TOT) has hovered near the top of our screens for a few months. The price-to-fair value ratio at Morningstar is 89% and the PnF sentiment is “bullish” with price pressure of +71%. The PAR is 15-16% and the Value Line low total return forecast checks in at 16% also. With a top decile quality ranking and an overall fusion rank of 100, the stock is worth a closer look.

I think Varian Medical (VAR) and Masimo (MASI) are probably impacted by the medical device tax debate. They’re both leaders in key areas, targeted radiation therapy (Varian) and non-invasive monitoring (Masimo). The debate is a little like watching a dog chase it’s tail. Call it a tax or surcharge or whatever, it incrementally elevates the cost of health care (bizarre since it’s embedded in an affordable care law) — and patients either pay more or these companies atrophy margins.

Coach (COH) continues to fire on all cylinders and the cash register queues refuse to abate.

Screen 20130501

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s