Stocks With a One-Two Punch
During our unscheduled market holiday, I spent a lot of time doing research using Piotroksi scores. The F-score model has been a valuable tool in my arsenal for uncovering value stocks with high appreciation potential, and I am looking at new ways to use the model. But, as we all know there is certain amount of validity to that old adage, "If it ain't broke, don't fix it." The original research paper that introduced the model by Professor Joseph Piotroski was focused on stocks trading below book value ranked by F-score. Those with high scores outperformed the overall market by a wide margin.
With that thought in mind, I sat down and ran a basic screen. Using the model, I looked for stocks with F-scores above 6 that trade below book value. In my first version of the screen, I added some financial-strength criteria and only included those companies with a current ratio above 2 that own as much as they owe. This should give us a list of financially strong companies that are cheap and have improving fundamentals and prospects....536 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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