donderdag 14 augustus 2014

Stock Screener: Take Four: Tortoise Energy Infrastructure Corp. (TYG)

Remember my post on KYN, my post on SIMO and my post on TAICY? All have been moving higher in double digits.

Track record 3-0.Time to move on.

If I don't have any ideas anymore what to buy, I use the stock screener.

What you want to do is filter on 4 attributes: market cap, P/E, dividend yield and percentage change.

1) Market Cap: do not choose small companies as they are mostly fraudulent or don't have sustainable earnings. Don't choose big companies because these are not volatile enough to get fast profits from. I'd filter between 200 million and 4 billion.

2) P/E ratio: choose the companies with the lowest P/E ratio, these companies are dirt cheap while still having earnings. Cheap is below P/E of 5. But do not choose below P/E of 2 because those are mostly companies that are going bankrupt or have bad growth.

3) Dividend yield: always choose companies that have dividends, because these companies have real earnings and can prove they have sustainable earnings to reward investors. The higher the better of course, but don't push it above 7% as those companies probably don't have the money to pay out dividends on a regular basis. I'd go for companies with dividends between 3% and 7%.

4) Volatility: don't choose companies that are so volatile. Maximum year over year change should be between the 20% range.



We use the exact same parameters as above.

And we find that there are some candidates in the energy sector.Tortoise Energy Infrastructure Corp. (TYG) seems to be the only candidate worthy enough to buy. It has a P/E of 4.5, which means its share price will grow at least 23% per annum. With dividends of 5% I expect the share price to at least appreciate in the 10% per annum. This is not much, but I don't see any other stocks worthy to buy at this moment. The stock market is overextended in bubble territory. America is now in an oil and gas boom, so infrastructure on petroleum should be ok to invest in.

Let's keep this stock screener thing going and see if this isn't the easiest way to make money! (without even knowing what the company is doing)

I'm wondering when our gold and silver mines are going to pop up on the stock screener. But it's too early, today none are even making money yet...

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