Product Description

The analysis and exclusive data that help Standard & Poor’s professionals find hot stocks—now available to you

The Standard & Poor’s Guide to Selecting Stocks reveals the stock selection methods of Standard & Poor’s—the preeminent global provider of independent, highly valued investment data, valuation, analysis, and opinions. Clear descriptions give you the guidance to screen for stocks that meet criteria essential to receiving a STARS recommendation, from earnings momentum, to historic reaction to interest rate changes, earnings quality, governance superiority, and more.

---

Product Details

• Amazon Sales Rank: #811974 in Books
• Published on: 2005-10-26
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 224 pages

From the Back Cover

Learn the secrets of stock screening to see what the pros use to uncover bargain stocks ahead of the crowd

Picking winning stocks is not easy to do. Yet for more than a century, the experts at Standard & Poor's have shown time and again that they know which factors to screen for and which to ignore in selecting stocks poised to provide better-than-average returns.

The Standard & Poor's Guide to Selecting Stocks shows you step-by-step ways to discover good investment candidates in a time-saving and inexpensive way. Compiled by veteran Standard & Poor's analyst Michael Kaye, this valuable inside look features:

• Insight into allowing investors to compare one investment to another
• Giving direction to when to buy or sell a security
• Real-world examples of Standard & Poor's unique blend of qualitative (analyst-driven) and quantitative (model-driven) approaches in action

Standard & Poor's stock reports are the financial industry standard, with more than 100 independent global research analysts providing detailed coverage of over 1,900 companies. Discover what Standard & Poor's analysts do to locate stocks with the greatest growth potential, and how you can use their techniques to enhance your long-term returns, in The Standard & Poor's Guide to Selecting Stocks.

More than 10,000 equities are publicly traded on U.S. exchanges alone. Daunted by this overload of alternatives, many investors rely on "hot" tips, media sound bites, and subjective personal experience to decide which stocks to buy.

A growing number of professional and individual investors, however, have begun to use easy-to-follow "screening" techniques to reduce the unprecedented universe of investment possibilities into a far more manageable group. These techniques remove emotion and force greater discipline into the investment process, helping investors to choose stocks based on characteristics that are important to them and to be more proactive and objective when comparing possibilities.

Despite this success and popularity, screening is a subject about which little has been written. The Standard & Poor's Guide to Selecting Stocks corrects this oversight, detailing specific screening techniques used by Standard & Poor's analysts to find stocks that have the greatest potential for upside growth with minimal downside risk. Explaining screening concepts in plain English and accessible mathematics, this market-ready research manual reveals:

• Steps in the screening process, along with where to find and how to use the best screening tools
• Specific techniques for screening for growth, value, dividends, or momentum, along with stocks in individual sectors
• Ten characteristics to avoid, from high debt to overly expensive valuation
• Which financial data are both readily available and valuable as filtering criteria
• Factors that should be stressed when screening for mutual funds and bonds
• Reverse engineering strategies for analyzing and replicating the results of top investors and techniques
• A valuable listing of websites with stock screeners
• Examples of stock, bond, and mutual fund screens

Investors often devote more attention and analysis to where they will eat Saturday night than to where they will invest their life savings. The Standard & Poor's Guide to Selecting Stocks helps to take the mystery and subjectivity out of the stock selection process as it unveils a disciplined, detailed methodology for screening and selecting investments based on solid financial and personal criteria.

About the Author

Michael Kaye, CFA, is a portfolio analyst for Standard & Poor's Investment Advisory Services LLC. He serves as a deputy portfolio manager for accounts sub-advised by Standard & Poor's, conducts back tests on equity portfolio strategies, and develops stock screens. Additionally, Kaye writes the weekly "Stock Screens" column for BusinessWeek Online and has been quoted in publications including Standard & Poor's The Outlook, Kiplinger.com, Faz.net, and others.

Standard & Poor's is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research, data and valuations. An essential part of the world's financial infrastructure, Standard & Poor's has played a leading role for more than 140 years in providing investors with the independent advice they need to feel more confident about their investment and financial decisions.

---

Customer Reviews

A guide to screening stocks using online software
The title of this book should be selecting stocks using online screening software. There is little on fundamental analysis of the kind used by S&P in determining their ratings. It's not a long book, about 222 pages. There are chapters on the various kinds of stocks one might screen for: a chapter on growth stocks, for example, briefly describes the key characteristics of growth stocks, and then gives the parameters for 3 or 4 different screens that can be used to find stocks. And so on for value stocks, growth at a reasonable price (GARP), dividends, momentum, specific sectors, mutual funds, bonds, and a couple more. The author doesn't argue for any particular investment style, just describes the alternatives and how to find those stocks. There are many free on line screeners that can be used to follow this method, for example from Yahoo and Morningstar. The best on line screeners, with the most available screening parameters, however, cost subscription money. I hope this review helps explain what this book is and what it isn't, since the title is not particularly informative.

Excellent investing tool to help your stock investment options
The Standard & Poor's Guide to Selecting Stocks by Michael Kaye is a very solid book that focuses on the basics of stock screening. Various stock screen will yield various type of investing options depending on what one is looking for (ie growth, value, dividends, momentum, etc). Be aware that stock screening allows investors to find a list of stocks based on various financial parameters (forward P/E ratio, cash flow, market capitalization, return on equity, etc) input by the user, but does not mean that every stock returned from the screen is a winning investment option. Kaye emphasizes that screening for stocks is the first step in the investment process and should be used as a tool to keep investors informed on what options they have.

One thing I found really interesting in his screens is that in his investment screen for GARP, growth at reasonable price, many of the companies that were derived were housing stocks like Hovanian (HOV), Toll Brothers (TOL), The Ryland Group (RYL), Pulte Homes (PHM), and Centex Corporation (CTX). Some of the screening parameters included a PEG ratio of between 0 and .75 with a return on equity of at least 20%. These housing companies are nowhere near their highs from years back and still are looking for a bottom so this is an example that stock screens need to be properly evaluated even if they look like good investments at the time. Another interesting screen looked for value stocks that have a high rate of insider purchasing. One of the ten stocks returned from that screen was Las Vegas Sands (LVS) and the price was at 42.85 at the time. Holding until today would have yielded a 300% gain so sometimes it really is worth taking a gamble but using a stock screener can help allow you to take a calculated gamble while lowering your risk.

Amateur investors or experienced investors can get a lot from this book.
a) Beginners: They will find a way to learn about companies that meet their investment themes, and decide whether the company is worth researching more about.

b) Experienced: These people will already have stock investments in mind and stock screening can allow one to find out if there are better investments available. Screening needs to be done continuously, whether it's on a weekly or month basis, because stocks that are returned from a screen will always be changing.

Things to try on your own after getting this book:
1) Based on Kaye's stock screens in late 2004, see how the stocks returned from the screens are doing currently
2) If you like a particular stock screen, put some of the financial inputs from his stock screen to see what companies would turn out today

Overall grade: A-

I didn't read through chapter 11 (screening for mutual funds) or chapter 12 (screening for bonds) as my main focus was to learn about screening for stocks. The first 100 pages of this 229 page book gives a very comprehensive overview of various stocks screen with many examples of each type. Again, use this book as a tool for investing and not as a magic list of stocks.

Standard & Poor's Guide to Selecting Stocks
Teaches how you screen for stocks. It is the only book I have
come across that teaches the basics of stock screening. An added
benefit is that most of the stock screeners discussed are free to use.