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How Many Stocks Can Pass GuruFocus Value Screeners? September 3, 2013

September 04, 2013 | About:
Vera Yuan

Vera Yuan

75 followers
Starting in August, GuruFocus will track the number of stocks that can pass each value screener across different regions. This will give some idea of the general market valuations. The August stock lists can be seen here.

GuruFocus provides value screeners for our Premium members to generate ideas with proven value strategies. GuruFocus All-In-One Screener also allows subscribers to create their own value screeners with more than 150 filters. Here we want to see how many companies pass different stock screeners in different region and which companies can pass most of the screeners.

The following are the number of companies that pass the screeners:

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Note: the Peter Lynch Screener and Walter Schloss Screener can be found through the All-in-One Guru Screener. The complete stock list can be seen by clicking the link.

We can clearly see that Asian markets are where we can find most Ben Graham net-nets and Walter Schloss stocks. This is not surprising as emerging markets lost their favor. Chinese stock markets are traded at five-year lows.

In the most recent memo by the legendary Howard Marks, he discussed “The Role of Confidence” in investment decision making. He pointed out that a few years ago investors were wildly optimistic about emerging markets. But now these days the same group of investors is pessimistic about emerging markets. Our screeners indicate that a lot more bargains can be found in Asia.

The companies that pass the Undervalued Predictable screener doubled in Europe. This is probably because the European market was down in August which provides more opportunities in Europe.

The following are the U.S. stocks that passed at least three screeners as of Sept. 3, 2013:

The following are the Canadian stocks that passed at least two screeners as of Sept. 3, 2013:

The following are the UK/Ireland’s stocks that passed at least two screeners as of Sept. 3, 2013:

The following are the European stocks that passed at least three screeners as of Sept. 3, 2013:

Table 4: Stocks Passed At Least Three Screeners - Europe
ORCHE8WW6CSAWMTUNHOCBAUEHAE1SEO
ExchangeFRAFRAFRAFRAFRAFRAFRAFRAFRAFRA
Benjamin Graham
Undervalued PredictableXXXXXXXXXX
Buffett-MungerXXXXXXXXXX
Low P/SXXXX
Low P/BXXXX
Peter LynchXXXX
Walter SchlossX
NFSPSRAHY7KHPJF1CXRAGB1APOAGR
ExchangeFRAFRAFRAFRAFRAFRAFRAFRAWBO
Benjamin Graham
Undervalued PredictableXXXXXX
Buffett-MungerXXXXXX
Low P/SXXXXX
Low P/BXXXX
Peter LynchXXXXXXX
Walter Schloss
The following are the Asian stocks that passed at least two screeners as of Sept. 3, 2013:

Table 5: Stocks Passed At Least Two Screeners - Aisa
7427ALKA273717027097500980686938J3629172445
ExchangeTSEISTTSENGOXKLSTSETSETSESGXTSEXKLS
Benjamin GrahamXXXXXXXXX
Undervalued Predictable
Buffett-Munger
Low P/SX
Low P/BXX
Peter LynchX
Walter SchlossXXXXXXXXX
K3FD9476365279067859U014793591879287488600011
ExchangeSGXTSETSETSETSESGXTSENGOTSENGOSHSE
Benjamin GrahamXXXXXXXXX
Undervalued Predictable
Buffett-Munger
Low P/SXX
Low P/B
Peter LynchXX
Walter SchlossXXXXXXXXX
46217970O39R010119323300104460002800386C0900902
ExchangeTSETSESGXSGXHKSETPEHKSESHSEHKSESGXHKSE
Benjamin GrahamXX
Undervalued PredictableXXXXX
Buffett-MungerXXXXXX
Low P/SXXXX
Low P/BXXX
Peter LynchX
Walter SchlossXX
The following are the Oceania stocks that passed at least two screeners as of Sept. 3, 2013:



The following is a brief summary of different screeners.

Benjamin Graham Net Current Asset Value Screener

Benjamin Graham defined a net-net value as cash and short-term investments + (0.75 * accounts receivable) + (0.5 * inventory) - total liabilities. He looked for companies whose market values were less than two-thirds of that net-net value. The rules of the screener are as follows:

  • The stock prices are less than the net current asset value of the companies – Benjamin Graham.
  • During the past 12 months, the companies generated positive operating cash flow.
  • The company has no meaningful debt compared to its cash position.
  • According to Benjamin Graham, some of these companies may well go under as economic conditions worsen. It is important to hold a diversified group of them.
Undervalued Predictable Companies - Discount Cash Flow and Discount Earnings

GuruFocus applied the discounted cash flow and discounted earnings to the top-ranked predictable companies and calculated the intrinsic values of the these companies. These are the companies that appeared to be undervalued. The intrinsic value of the companies is calculated with Future Earnings at Growth Stage + Terminal Value.

Buffett-Munger Screener - Good Companies at Fair or Undervalued Prices

The Buffett-Munger Screener can be used to find companies with high-quality business at undervalued or fair-valued prices:

  • Companies that have high Predictability Rank, that is, companies that can consistently grow their revenue and earnings.
  • Companies that have competitive advantages. They can maintain or even expand their profit margin while growing their business
  • Companies that incur little debt while growing their business.
  • Companies that are fair valued or under-valued. We use PEPG as the indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past five years.
Companies at Historical Low Price/Sales Ratios

These companies have been very predictable in their business operations. They are sold at close to historical low price/sales ratios. Their sales and earnings have consistently grown for at least the past decade. However, the price/sales (P/S) ratio of each of these companies is less than 30% above its historical low.

Companies at Historical Low Price/Book Ratios

These are the predictable companies that are sold at close to historical low price/book (P/B) ratios. Their sales and earnings have consistently grown for at least the past decade. However, the price/book (P/B) ratios of these companies are less than 30% above their historical lows.

Peter Lynch Screener

  • Companies that have Predictability Rank of at least 2 stars.
  • Companies that have P/E ratio of at most 14.
  • Companies that have 10 years revenue growth rate of at least 6%.
Walter Schloss’ Screener

  • Companies that have Altman Z-Score of at least 2.99. Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations. Altman Z-Score is calculated with this formula: Z = 1.2X1 + 1.4X2 + 3.3X3 + 0.6X4 + 1.0X5 where
X1 = working capital/total assets,

X2 = retained earnings/total assets,

X3 = earnings before interest and taxes/total assets,

X4 = market value equity/book value of total liabilities,

X5 = sales/total assets.

  • Companies that have interest coverage of at least 10. It is a ratio that measures the burden of the debt a company carries and how easily the company can pay off its debt. It is calculated by dividing a company’s Operating Income (EBIT) by its Interest Expense.
  • Companies that have price to tangible book of at most 1.0.
  • Companies that are max 25% above a three-year low.
Both the Peter Lynch Screener and the Walter Schloss Screener can be found through the All-in-One Guru Screener. GuruFocus premium membership is needed to access the details of the portfolios and screeners. We also publish a monthly Buffett-Munger newsletter which features the picks from the Buffett-Munger Screener. If you are a premium member, you can download this for free. If you are not a Premium Member, we invite you for a 7-day Free Trial.

GuruFocus Global Membership allows you to screen for bargains in Global Markets. We now cover more than 50,000 stocks in 32 countries across five regions. Take a 7-day Free Trial.


Rating: 4.2/5 (5 votes)

Comments

etinarcadiaego
Etinarcadiaego - 11 months ago


Hi Vera, thanks for another informative article. I was hoping you could further my understanding on the matter of combined screens. Is there any benefit to focusing on companies that show up on multiple screens? Put differently, are the returns of companies that pass three screens more attractive than companies that pass only one screen? I've been unable to find an answer to this question despite studying the website in detail. Thanks for your help.

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