Wednesday, May 18, 2011

How To Build Your Own List Of Stocks To Buy Today Using Investors.comAnd Their eTables Service

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I wanted to spend some time talking about how to build your very own list of potential stocks to buy using the tools at investors.com. I started from scratch building a watch list on Monday to document the exact steps I take to build my list. The idea behind building a list of stocks you might consider buying is to reduce the number of stocks that you need to focus on at any given time. There are thousands of stocks to choose from and it's impossible to look at all of them every day. To achieve this purpose, you use stock screens to whittle down the number to something that is more manageable. The first screen I use is by index. I only look at stocks on the NYSE and the NASDAQ. I recommend that you do the same.

From there, here's what you'll need:


  • A subscription to Investor's Business Daily. I personally subscribe to the eIBD which is the electronic version of the paper. This is awesome because you have the paper available each night and don't have to wait until the next morning.

  • A subscription to the eTables premium service on investors.com. I recommend a subscription to eTables because you can download the IBD 50 Index, the IBD New America Index, the IBD 85-85 Index, the IBD Big Cap 20 and the Main Tables to a spreadsheet.The first thing that I did was log into investors.com and go into my eTables. Inside, there's a section that is called Main Tables. I downloaded that list of stocks to a spreadsheet so I could cut and paste the stock symbols and put them into my stock lists at investors.com. You can only put in 50 at a time, so since there are about 300 stocks in the main tables, you have to do these steps a handful of times to get through them all.

In case you don't know, the main tables are the list of the top 300 or so stocks based on the Smart Select Composite rating that IBD uses. It is basically like the IBD 200 only with more stocks.

With the My Stock List tool, you have the ability to sort your stocks and see information on:

  • Price & Volume

  • Fundamentals

  • Smart Select

I took the first 50 stock symbols and put them in a my stock list that I named "research". I start my search by reviewing the price and volume. I sort the stocks by price and I eliminate all stocks that are below $15 and the I sort it by volume and eliminate all stocks that have under 100,000 shares in trading volume.

Then I move onto the Smart Select ratings and review the Composite rating, EPS rating, RS rating and only keep those that are 80 or better. After that, I only keep stocks that are B- or better in the SMR rating, Acc/Dist rating and in Group Relative strength.

Once I have done that, I then move onto the fundamentals section and only keep stocks that are over 25% in EPS % Change (Latest Quarter), EPS % Change (Prior Quarter), Sales % change (latest quarter), EPS estimated % change (current quarter) and EPS estimated % change (current year).

I then repeat this process until I have looked at all of the stocks. As I go through each set of stocks, I put the stocks that made the cut into another my stock lists that I named Watch List.

The next step for me after I do that is to identify those stocks with less than 100 million in float. I find this information by clicking the chart icon and it's on the top of the chart.

The stocks that are left are the stocks that I might potentially buy but only if they are at proper buy points and the market is in a confirmed uptrend. It's important to remember that if a stock appears on my list it doesn't mean that I should rush out and buy it. It just reduces the number of stocks I need to keep an eye on. The next step in the process is to look at a chart of each of those stocks to identify a proper buy point. I'll talk more about that in my next post on Stock Market Investing Today.

Creating a list of stocks for the first time is just the first step in maintaining an inventory of great stocks. Your list of stocks is only as good as you make it. That's why you'll want to also make sure to:

  • Commit to reviewing your list every day. Stocks are dynamic and they change daily. An out of date list will not serve you well.

  • Add new stocks to the list. My main source of new stocks for my list on a daily basis will be from the Stocks on the Move section and on a weekly basis from the Main Tables.

  • Prune stocks from the list on a daily basis that fail to meet the initial threshold it took to get on the list.

  • If the list gets two big, either tighten the criteria of set a limit of 20 stocks depending on time available.

So that's how I find potential stocks to buy down the road. I think you'll find that managing a watch list will be very important to your investment success and by using the tools at investors.com, you'll be way ahead of the game.

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Michael is a champion of guaranteed issue for employees in the workplace. He's been an insurance agent since 1992 and has worked with thousands of employees.

4 comments

I found your article very interesting and down to earth. I currently will invest $25.000 in four stocks that I picked. I really don't have your skill but could you please give me some advice on the three I am interested in. AGNC,FTR, WIN, and NLY. Please resend the Ex dividend is the 6th for FTR or WIN and I will try to get in by then if the price is between a 52 week high and low..

Hey Jimmy,
For me personally, these stocks would not meet my screening criteria. That isn't to say they won't go up in price, it is possible, as they have been under some accumulation. They don't meet the definition of the canslim stocks which is the investment strategy I follow due to lack of strong earnings. Keep us posted as to what strategy you are following and why you chose these stocks in particular. The best thing you can do is adopt a proven investment strategy and follow it exactly. Thanks for taking time to make a comment and good luck to you.

Do you have any recent blogs regardiing posible stocks to buy now?

Not at the moment. A good list to review would be the IBD 200 in Investors Business Daily.


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