A recurring question at Stock Selec...

A recurring question at Stock Selection Guide workshops and discussions with investors across the rural parts is: "How do I find stocks to study?" This Computer covers column was started to help readers find interesting stocks to study

IN SEARCH OF EP GROWTH

Consistent germination in earnings per share ("EPS") is common of the primary indicators of quality management. Companies that manage to increase EPS consistently during tough economic times are particularly notable and make interesting candidates for cogitation with the aid of the Stock Selection Guide and the Stock Tracking Guide.

A convenient way to identify companies that manage to extend EPS during difficult times is to use a computer to search a database. Various 'on-line' financial databases are available to investors with a computer and a modem You can dial-up these databases and search for companies that confront any screening criteria that you wish to specify.

Alternatively, you can purchase a database available upon computer diskettes such as that produc at Stock Guide Publications Inc. I asked the proprietor, Marcel Longpre to defence his database of about 1000 companies for those that suited several EPS growth criteria. The covers reflect EPS data available for the latest three fiscal years as of May 22 1993

SCREEN I

Companies whose fiscal-year EP (before extraordinary items) were positive for each of the past three years (330 companies passed this screen)

SCREEN 2

Those companies satisfying the first cloak were then screened for those with EP each year greater than the previous year (149 companies passed this screen)

SCREEN 3

Those companies satisfying the inferior screen were then screened to identify companies whose EP pullulation for the most recent fiscal year was greater than the EP development for the previous fiscal year (90 stocks companies passed this screen)

SCREEN 4

Companies satisfying the third cloak were then screened for those that had a intermix EPS annual growth rate of 10% or more (80 companies passed this screen)

SCREEN 5

Eight companies survived riddle 4 because of "unusual" items; they are exclud from the accompanying Table.

In total, 72 companies passed this screening proces Similar protections reported in 1993 and 1992 issues of the magazine identified 22 and 30 companies (respectively).

STUDYING STOCKS

You ne at least five years of data about five company fundamentals to application of mind a stock's investment potential (i.e. receipts EPS, operating profit margin, revert on common equity, and high and depressed share prices during the fiscal year). You may be able to obtain these data from a variety of sources.

First seek counsel the most recent edition of the Guide Data work which is available to members of the Canadian Shareowners Association. This main division contains data for completing Guides forward over 400 Canadian and U companies. In addition, the data are also available in succession computer diskettes called GuidePak. If you have Release 3 of the computer version of the Stock Selection Guide (SSG3 or SSG3L) you can transfer the data from GuidePak to Release 3 simply according to key-entering the stock symbol and "Alt T"

Second don't be reluctant to ask your full-service agent to provide you with data. mostly modern full-service brokers want their clients to understand the companies that they invest in. For a fee-simple (e.g. $15-$20), some of the discount factors will also provide you with various data and research commentary about a specific company.

Third, you can write or call a company you're interested in and ask for a model of the current annual report and other reports necessary to have at least a five-year historical financial record.

Fourth, you can visit your local public, society or university library which oftentimes have historical financial data available for at least the larger companies.

Fifth, many commercial databases (in printed or computer format) are available that can provide you with the information povertyed for studying stocks.

Whichever sources are available to you, be assured to use them; remember, it's not a advantageous idea to "blind-date" stocks.

Copyright Canadian Shareowner Magazine Inc. Jul/Aug 1994

Provided by way of ProQuest Information and Learning Company. All rights Reserved