Subscribe in a reader



Righteous Rockets

An Overview of the Righteous Rockets Investment Strategy

Location of Screen: The Righteous Rockets screen is loaded by default in the MSN Deluxe Screener

Inception: This investment strategy was defined by MSN for use in their Deluxe Screener.

Righteous Rockets investing strategy summarized

The Righteous Rockets investment strategy attempts to find companies which are undervalued, profitable, and have little debt, thus making them “righteous”. Also, the companies must show fast growth with high stock price gains, making them “rockets”.

Stock Screen Parameters for the Righteous Rockets Investment Strategy

The parameters for this screen are listed below. The text in italics explains how the parameter was defined in the screener. I use the MSN Deluxe Screener to find these specific stocks.

1) Market Capitalization: Weed out the tiny companies which are often more volitile

Parameter: Market Capitalization >= 50,000,000

2) Return on Equity: Find companies which make good use of investors money by showing strong returns per dollar of equity

Parameter: Return on Equity >= 5

3) Price/Sales Ratio: Locate those companies whose price is not greatly inflated compared to their last period revenues, showing they may be undervalued

Parameter: Price/Sales Ratio <= 2

4) Debt/Equity Ratio: Find companies who are not heavily leveraged; part of the righteous aspect of this screen

Parameter: Debt/Equity Ratio <= 0.5

5) Recent Quarter Surprise: Avoid companies who have surprised the market analysts by reporting less than expected quarter results

Parameter: Recent Quarter Surprise % >= 1

6) Growth Year vs Year: Find companies whose revenues and earnings have grown by magnitudes the past year

Parameter: Revenue Growth Year vs Year >= 20
Parameter: EPS Growth Year vs Year >= 20

7) Price Changes: Look for the rockets by locating a huge jump in price over the past year, and make sure it hasnt come to a stop by also checking the past quarter

Parameter: % Price Change Last Year >= 50
Parameter: Recent Quarter Surprise % >= 1