The New Stock Screener on the Block
By Geoffrey Smith
By some measures, the Internet has lost its cachet as a source of investing information: Message-board traffic is way down, and Web sites promising the latest stock tips have all but disappeared. At the same time, however, big financial portals have been quietly adding to their investing aresenals. An example is One-Click Scorecard, a recent addition to Quicken.com. It's one of the most revealing and versatile stock-screening tools around.
One-Click Scorecard evaluates stocks using four different approaches, each with its own screen. Even if it can't identify accounting fraud or single out companies that might have cooked the books, Scorecard provides multiple opinions on stocks as well as solid, objective information. The screens are based on investment strategies developed by Warren Buffett protégé Robert Hagstrom, The National Association of Investors Corp. (NAIC), investment newsletter writer Geraldine Weiss, and The Motley Fool. It's free on Quicken's Web site, Quicken.com.
PROS AND CONS.
I know -- it's hard to imagine Buffett's philosophy and the Motley Fool in the same stock screener. But that's the beauty of this one -- providing stock analysis from multiple points of view. How does a growth investor see the stock? How does a value investor see it? Together, the screens provide insight into a stock's pros and cons by quickly answering a series of questions that professional investors ask.
The Fool, for example, offers advice targeted mostly at small-cap stocks. Among the questions it answers about a company is whether it has high-quality earnings, whether it generates rather than consumes cash, and whether it has broad interest from institutional investors.
The Buffett approach, on the other hand, asks such questions as "Has the company avoided excess debt?" and "Can managers convert sales to profits?" The other screeners apply different tests. The NAIC Established Growth strategy is looking for the most promising large-cap growth stocks, while Geraldine Weiss' Blue-Chip Value strategy identifies the most promising large-cap value stocks.
All four screeners use charts to supplement the answers given, and each also gives you a list of recommended stocks.
I wondered how Citigroup (C ), a big holding in many large mutual funds, would be evaluated. When I plugged in the ticker and selected the NAIC strategy, I got the answers, as well as a tip saying that I could use any screener for the stock. But because Citigroup is a large-cap value stock, it was recommended that I use Geraldine Weiss' Blue-Chip Value strategy instead. Both screens, while using different criteria, gave it the same overall rating: No Interest.
As with any tool, you still have to do a lot of follow-up research and apply your own judgment. But the One-Click Scorecard is an easy-to-use screener that gives you a lot of information quickly.
Smith covers online banking and finance in BusinessWeek's Boston bureau