Q: Screening under value stocks with low risk

I'd like to raise a question regards to validating the following approach. I hope that I can get DQ stock SME's approval. Thank you in advance.

Goal: Find some under value stocks with upside potentials with low risk. i.e., the chance for the stocks going further down is very minimum.

Method:

1) Debt Ratio or DR: (Total Liabilities) / (Total Asset) in the latest or previous balance sheet. Expect that DR is around 50-60% or lower. No greater than 70%.

2) Market Cap ratio or MCR: Market Cap / ((Total Asset) - (Total Liabilities)). Expect that MCR is less than 1.0, ideally 0.7 or lower, and no more than 0.9.

Once the stocks passed these two criteria, you can do further FA/TA as necessary.

I found that the following stocks on the competition list in this week passed screening:

DRYS, COCO, DSX, JKS, OCZ, CHK, etc

Then you can further select these stocks based on your analysis and preference.

Does this approach make any sense? Your comments are highly appreciated.

所有跟帖： 

• growth factor? -mom2016- ♀ (0 bytes) () 01/07/2013 postreply 19:56:59

• 回复：growth factor? -Slothehz002- ♂ (123 bytes) () 01/07/2013 postreply 20:20:45

• drys的债务应该不低，不过我记得不准 -cat18- ♀ (0 bytes) () 01/07/2013 postreply 19:57:45

• drys FA was terrible. it showed some good TA. -mom2016- ♀ (0 bytes) () 01/07/2013 postreply 19:59:26

• 我剩下的Drys属于纯利润了 -cat18- ♀ (0 bytes) () 01/07/2013 postreply 20:00:41

• 回复：drys的债务应该不低，不过我记得不准 -Slothehz002- ♂ (175 bytes) () 01/07/2013 postreply 20:22:49

• 你这5个股里面我有三个 -cat18- ♀ (0 bytes) () 01/07/2013 postreply 19:58:45

• 回复：Q: Screening under value stocks with low risk -fouquets- ♂ (160 bytes) () 01/07/2013 postreply 20:21:40

• 用 debt 和 asset 来筛选意义很小 -brokenprice- ♂ (251 bytes) () 01/07/2013 postreply 20:40:20

• Totally agreed -Slothehz002- ♂ (168 bytes) () 01/07/2013 postreply 20:49:41

• 耶，以前我也是用过的。看你准备持多少支股吧，其中一两支可能可以用这方法。 -金笔- ♂ (163 bytes) () 01/07/2013 postreply 22:48:56