A couple of threads have mentioned fundamental analysis. In the December Smart Investor, Peter Lynch( One up on Wall Street) fame, shares how he selects stocks. He selects on a score basis. Stocks that score 4 or more out of 7 are included.
No financials or REITS. 1. P/E is less than the industry median P/E.(1 point). 2. P/E is less than the 5 year average P/E (1 point). 3. PEG ratio is less than 0.5 (2 points). 4. Five-year growth in EPS from continuing operations is less than 50% (1 point). 5. The percentage of shares held by institutions is less than the medium percentage of insto ownership for the whole data base(1 point) 6. Total assets to liabilities is less than the industry's medium(1 point).
He has a table of share selected with the top scorer (6) being TFS Corporation TFC.
