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Desperate Housewives - Episode Two

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Previously in Episode One: The absolutely worst news of the week came when I logged into Reuters to use their stock screener. The free custom screener I have relied on for so long is gone from their menu! No other free screener began to compare....

The first alternative free screener I tried out was Morningstar's. Below are their custom screening choices.

Stock Basics
Stock sector: Any, Software, Hardware, Media, Telecom, Healthcare, Consumer, Business, Financial, Consumer Good,s Ind Materials, Energy, Utilities.
Morningstar stock type: Any, Aggressive Growth, Classic Growth, Cyclical, Distressed, Hard Assets, High Yield, Slow Growth, Speculative Growth.
Morningstar equity style box: Any, Large Value, Large Core, Large Growth, Mid Value, Mid Core, Mid Growth, Small Value, Small Core, Small Growth.
Minimum market capitalization: Any, $10 bil, $5 bil, $1 bil, $500 mil, $250 mil.

Morningstar Stock Grades (A thru F on each):
Growth grade
Profitability grade
Financial Health grade

Company Performance
3-year revenue growth greater than or equal to: Any, 0%, 10%, 20%, 40%, 80%.
Return on equity (ROE) greater than or equal to: Any, 0%, 5%, 10%, 15%, 20%.
5-year forecasted earnings growth greater than or equal to: Any, 10%, 15%, 20%, 30%, 50%.

Stock Performance (Choices are Any, >= Sector average, >= S&P 500, >= 0%, >= 20%, >= 40%, >= 80%, >= 100%, <= 0%, <= -20%, <= -40%.)
YTD total return
1-month total return
3-month total return
1-year total return
5-year total return

Valuation
Trailing P/E ratio less than or equal to: Any, 10, 15, 20, 30, 50.
P/E-to-Earnings Growth Ratio (PEG) less than or equal to: Any, 0.5, 1.0, 1.5, 2.0, 3.0.
Dividend yield greater than or equal to: Any, 0.5%, 1.0%, 2.0%, 4.0%, 6.0%.

I hoped that some of the screening items might help me find stocks fulfilling my
Strategy Lab criteria or smaller companies appropriate for my ongoing Marketocracy fund Magic Microcaps Fund.

To begin with, I didn't set any criteria under "Stock Basics". If only I were able to choose a MAXIMUM market cap this would help me screen for Magic Micro Caps.

The Morningstar Stock Grades are useful, though I'd rather set up my own grading system. Screening just for companies rating "A" in all 3 areas, Growth, Profitability and Financial Health, nets 147 prospects of all sizes, styles, types and sectors.

To trim down the 147, I tried adding criteria under Company Performance, Stock Performance and Valuation. This brought the list of prospects down to Zero! Therefore, I kept only Financial Health, adding a grade of "B" to the choice, and then experimented with variations on performance and valuation.

Once you have a group of stocks via the screener, you can look at them in the following views: Snapshot, Stock Grades, Company Performance, Stock Performance, Valuation. These views show the figures for ALL the criteria listed in the screener, regardless of whether you had screened on them or not.

Although the Morningstar screens, on the whole, did not produce the kind of results I wanted, they did provide some data for some decent companies. As it is easy to merge databases of stocks, matching on their ticker symbols, the objective is to combine the Morningstar data with that of Yahoo, MSN, etc. Unfortunately, there is no easy way to download all the Morningstar data. It is possible to copy a chart from a Web page into a file as straight text and eventually turn the whole thing into a database; however that's a whole blog topic in itself.

Next stop, Yahoo, MSN and other leading screeners.

Footnote:
One company which kept popping up was Freeport McMoran Copper and Gold (FCX). This company is now added to my list for possible inclusion in the Strategy Lab Fund.