zaterdag 26 mei 2018

Stock Screener: Day 8: KBC Ancora (KBCA)

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

KBC Ancora, which holds KBC group shares, is valued at a discount when you compare the value of KBC group shares it holds to the value of KBC group itself. I believe earnings growth is accelerating and dividends will go up. KBC group also will buy back 220 million euro in shares towards the end of the year.

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.