Five From the SimpleVisor Screening Tool

By Michael Lebowitz | January 21, 2022
Simplevisor Screen, Five From the SimpleVisor Screening Tool

Our weekly scan idea comes from a subscriber’s request for a second week in a row. In this case, he is looking for guidance on using the SimpleVisor stock scanning tool to find Value Stocks.

We encourage you to send us a note with any scan requests you may have.  

This week’s article provides five S&P 500 value stocks from the SimpleVisor Screener. This report is slightly different from prior reports as the primary purpose is to walk you through how we used the Screener tool to find our five stocks.

Using SimpleVisor

The SimpleVisor Screener is found in the menu to the left under Ideas and Screener. The function allows you to save screens and create new ones.

The first step is to select the parameters or filters to screen stocks. As we show below, there are four categories to choose from: Descriptive, Fundamentals, Performance, and Technical. 

Simplevisor Screen, Five From the SimpleVisor Screening Tool

Next, look through the options in each of the four categories and make selections. You can choose as many or as few of the options as you like. The more factors you select, the fewer the resulting stocks, but the more refined your results will be. We will be adding a customizable field, so you can choose any range of options to refine your search further.

Once you finish selecting the options, click on Filter (blue). The area with the filter options will compress, and the results will appear. You can click through the four broad categories to see the stocks and their respective data. If you want to make changes to the filters, click on the down arrow to the left of Filters, and the box with scanning options will reappear. Make changes and hit Filter again for the new results.

If you like the scan and would like to save it, click the green Save As Screen button to the right of the blue Filter button. It will ask you for a name and description. Upon saving it, you can recall it in the Saved Screens box in the upper left corner. If you like the scan, you can add it to a Portfolio Watchlist and track how the group of stocks trades.

Simplevisor Screen, Five From the SimpleVisor Screening Tool

If your screen yields too many results, you can limit the results with the Sort and Limit functions. In the example below, we restrict the scan to the top 20 results sorted by Momentum. Hit filter to run this function. You can then sort results by clicking on any column header in the results table.

Simplevisor Screen, Five From the SimpleVisor Screening Tool

Value Screen

Now, on to this week’s results.

The screenshot below shows the filters we chose for this Value scan.

Simplevisor Screen, Five From the SimpleVisor Screening Tool

Screening Criteria

The first table below provides an overview of our results. The following three tables highlight the technical, fundamentals, and performance of the five stocks.

Simplevisor Screen, Five From the SimpleVisor Screening Tool

Technicals

Simplevisor Screen, Five From the SimpleVisor Screening Tool

Fundamentals

Simplevisor Screen, Five From the SimpleVisor Screening Tool

Performance

Simplevisor Screen, Five From the SimpleVisor Screening Tool

As shown above, our scan resulted in strong value selections. All five stocks have a P/S ratio of less than 1 compared to 3.20 for the S&P 500. Four of the five have forward P/E ratios of less than 10, less than half of the S&P 500. We used Monhanram and Pitroski scores to refine the search further to ensure we have financially healthy companies.

Company Summaries (all descriptions courtesy Zacks)

DOW Chemical (DOW)

Dow Inc. is a material science company, providing a world-class portfolio of advanced, sustainable, and leading-edge products. It recorded revenues of around $38.5 billion in 2020, offers a vast range of differentiated products and solutions across high-growth market segments such as packaging, infrastructure, and consumer care.

Its shares trade at the lowest PEG ratio on the list. This is due to the combination of its low P/E ratio (7.88) and lofty 3 to 5-year earnings growth expectations (~66%). In addition, the stock offers a healthy dividend yield (4.7%) and delivers the highest ROE of the five companies.

Fedex Corporation (FDX)

Based in Memphis, TN, FedEx Corporation is the leader in global express delivery services. The company, founded in 1971, provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently, and managed collaboratively, under the FedEx brand.

After a rangebound 2021 that ended essentially flat, FDX trades at a reasonable P/E of 14.3. FDX is enjoying strong demand and pricing power throughout the pandemic as ordering online becomes a larger share of consumption. That said, energy and payroll expenses have been rising as well, offsetting increasing revenue. FDX will likely continue seeing strong demand and solid earnings growth as supply chains recover and retailers re-build inventory.

General Motors (GM)

One of the world’s largest automakers, General Motors leads the U.S. market share with 17.1% of the industry’s total sales in 2020. From going bankrupt in 2009 to becoming one of the world’s best-run car companies, General Motors has indeed come a long way.

GM is the largest option by market cap and trades at the 2nd lowest P/E (8.2). As a highly capital-intensive company, it carries the highest Debt to Equity ratio (180%). GM’s push for the EV market presents an opportunity for the automaker to gain market share and deliver outsized returns to shareholders at deep value. Car sales tend to fluctuate with economic activity; therefore, its value may falter if we enter a recession.

Everest RE (RE)

Founded in 1973 and based in Hamilton, Bermuda, Everest Re Group Ltd. writes property and casualty, reinsurance and insurance in the U.S, Bermuda and international markets. The company also offers other innovative products like excess and surplus lines of insurance.

RE is the smallest of the screen results and trades at the second-lowest PEG ratio (0.19), with expectations for 3 to 5-year EPS growth of ~60%. In addition, the company has a relatively low D/E ratio of 19.2%, paired with solid financial liquidity.

Westrock (WRK)

Headquartered in Norcross, GA, WestRock is a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. The company is one of the largest integrated producers of containerboard by tons produced, and one of the largest producers of high graphics preprinted linerboard on the basis of net sales in North America. It is also one of the largest paper recyclers in North America.

WRK trades at the highest trailing P/E yet has the 2nd lowest forward P/E on the list, which indicates that WRK could see relatively strong earnings growth in FY22. Further, the stock trades at a very low P/S ratio of 0.66. It appears to be a good mid-cap value option.

 Five for Friday

Five for Friday uses stock screens to produce five stocks that we expect will outperform if a particular investment theme plays out in the future. Investment themes may be relevant to the current or expected market, industry, and/or economic trends. Investment themes may not always represent our current forecast. 

Disclosure

This report is not a recommendation to buy or sell the named securities. We intend to elicit ideas about stocks meeting specific criteria and investment themes. Please read our disclosures carefully and do your own research before investing.


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Michael Lebowitz, CFA is an Investment Analyst and Portfolio Manager for RIA Advisors. specializing in macroeconomic research, valuations, asset allocation, and risk management. RIA Contributing Editor and Research Director. CFA is an Investment Analyst and Portfolio Manager; Co-founder of 720 Global Research. 

Follow Michael on Twitter or go to 720global.com for more research and analysis.
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2022/01/21
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