Finding Opportunity with Stock Screener

Author: Gary Ashton

Estimated read time: 3 minutes

Publication date: 9th Mar 2020 22:00 GMT+1


Volatility is the name of the game in the markets lately. The S&P 500 index finished last week broadly unchanged but traded in a 235-point range as investors struggle to decipher the effects the Corona Virus might have on companies operating performance. Volatility like this can be very unnerving for a retail investor, and it is not always clear how to invest in choppy markets.

One place to turn is to Finscreener.com’s Stock Screener tool that allows users to screen for stocks that meet defined criteria. Users start by defining factors such as market, capitalization, sector, industry, and country. Additional screens exist for a range of investment factors such as a stock’s fundamentals, profitability, valuation, revenue, dividends, performance, etc. The output from this screening tool can be broken down for analysis and viewed based on various categories such as stock performance, compound growth rates, profit margins, dividends, valuations, and rankings.

Consumer Defensive Stocks

One area that is generating interest in the current environment is the Consumer Defensive sector. As people cut back on hotels, travel, and leisure activities, the consumer defensive sector could be a temporary haven. But not all consumer defensive stocks are winners. That is why Finscreener.com’s tool is so powerful. The screener can help investors find the stocks that, on average, have a better chance to outperform.

If we start by selecting Stock Screener, we can begin to filter down names that may present investment opportunities. For example, we start with the S&P 500 index and select large and mega-cap stocks. Under the “sector,” we choose Consumer Defensive. From here, we can sort by the stock’s year-to-date (YTD) performance to see who has held up under pressure so far in 2020. A final filter that can be applied is the dividend yield, in this case, between 3-10%. We are looking for companies whose stock prices are down a bit, but still have the prospect of paying a dividend.

Our filter gives us five stocks that are worth some additional analysis. Kimberly-Clark (NYSE: KMB), J.M. Smuckers (NYSE: SJM), Campbell Soup (NYSE: CPB), Philip Morris (NYSE: PM) and General Mills (NYSE: GIS). These companies could offer outsized total returns if they maintain a dividend payment and their current YTD price outperformance trend continues. It is probably not a coincidence that 4 of the five names are in the consumer-packaged goods industry. In the wake of the Corona Virus scare, people may be turning to packaged food that people can store for extended periods.


Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.com. The observations he makes are his own and are not intended as investment or trading advice.