If you are a medium or long term investor, you are faced with the problem of finding specific stocks that you can buy and resell at a higher price (long investing).
Undervalued stocks are attractive to investors because they have growth prospects (upside potential).
The problem for investors is that the number of shares in the S&P 500 index alone exceeds 500, in the Russell 2000 index (US Small Cap 2000) there are already a couple of thousand of them, and in total there are from several thousand shares to several tens of thousands of securities of various companies . Choosing among so many is difficult and not all investors who want to invest in stocks and make money using this tool can do it. In addition, stocks are often chosen among the so-called hype securities that are currently being heard, manipulated and reported in the news, but the real value of which may not correspond to their current market valuation.
The main question of the investor is how to choose a specific company? For example, if the price of a share has fallen or has been falling for some time, is this a real fall, or is there a temporary fall under the influence of a combination of emotional factors, and in a certain perspective, an increase in the share price of this company is possible?
Stock screeners provide a lot of stock selection options, but narrowing down the range is not an easy task, so not all potential stock investors use them. In addition, the screener gives a current snapshot of the state of market indicators and the question arises, how these indicators will affect future stock prices.
What is our advantage over existing stock selection systems:
• Big data. Purposeful analysis of a significant amount of market information to form conclusions.
Trading robots are not clear to everyone, they are complex and often require significant financial costs from the investor himself. At the same time, their goal is to perform a large number of transactions in a fraction of a second — that is, this is rather not investment, but speculation.
• Concrete choice and simplicity (small sample). You do not need to perform your own analysis. But you can use our recommendations in addition to your vision of the composition of the portfolio.
• You don’t have to pay for unnecessary news and quotes. Why do you need quotes, charts, if it is long and difficult to understand them?
• And finally, the most important thing: No hype, just pure analytics. We only analyze numbers.
Although this system does not claim to be absolutely accurate, it can nevertheless provide additional analytical assistance in a situation where a potential investor plans to:
• Find new opportunities and ideas for investments in the medium and long term.
• Find companies whose price (based on our analysis) may exceed their current price in the market. • Optimize or rebalance your stock portfolio.
• Diversify your stock portfolio.
• Avoid buying temporarily overpriced stocks that are in the hype zone (see examples VIAC, DISCA) or pump.
We determined undervaluation by comparing the companies P/E (price to earnings) and P/S (price to sales) multiples.