vrijdag 4 april 2014

Stock Screener: Take Two: Kayne Anderson MLP Investment Co.

Remember my post on Silicon Motion Technology (SIMO)?

Sometimes, if I don't have any ideas anymore what to buy, I use the stock screener.

What you want to do is filter on 4 attributes: market cap, P/E, dividend yield and percentage change.

1) Market Cap: do not choose small companies as they are mostly fraudulent or don't have sustainable earnings. Don't choose big companies because these are not volatile enough to get fast profits from. I'd filter between 200 million and 4 billion.

2) P/E ratio: choose the companies with the lowest P/E ratio, these companies are dirt cheap while still having earnings. Cheap is below P/E of 5. But do not choose below P/E of 2 because those are mostly companies that are going bankrupt or have bad growth.

3) Dividend yield: always choose companies that have dividends, because these companies have real earnings and can prove they have sustainable earnings to reward investors. The higher the better of course, but don't push it above 7% as those companies probably don't have the money to pay out dividends on a regular basis. I'd go for companies with dividends between 3% and 7%.

4) Volatility: don't choose companies that are so volatile. Maximum year over year change should be between the 20% range.

And the winner is: Silicon Motion Technology. This company is based in Taiwan and in the semiconductor business. Has pretty good earnings, doesn't look fraudulent and has bullish articles supporting it. Deutsche Bank initiated it with a buy to $24/share. And the board has recently authorized a share repurchase of up to 10% of the company. Maybe a good idea to buy if you have too much money.

If you bought that stock, you would have a 15% return in 3 months and a nice dividend of 5% per annum. Track record: 1-0.

Now let's go to our next stock. We use the exact same parameters as above.

And the winner is: 

Kayne Anderson MLP Investment Co.

It has extremely high and consistently growing dividends of 7%, is at book value and has very good earnings. It is a natural gas investment company and as you know, the U.S. is very competitive against Russia in this space. Marc Faber is bullish oil so I guess this will be a great investment going forward.

Let's keep this stock screener thing going and see if this isn't the easiest way to make money!

2 opmerkingen:

  1. Stock screeners are great and if you can find a stock screener which provides details of institutional ownership, then it is even better.
    Stock Screener