E The Foolish Small Cap 8 Screen Formula And Variations

The Motley Fool's Foolish Small Cap 8 Screen can help you pick trending small-cap stocks for the medium-long term. However, know that 2020 is a once-in-a-lifetime year in which corporate earnings have been smashed beyond recognition. Therefore, this post contains the original screener with 2 variations - the first variation compares the financials with the sector median and the second variation contains a couple of technical indicators to help you further sharpen your picks.  

Before getting to the formulas, know that the screener has delivered superior returns as compared to the SPX and the SP600 in the long run.

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Image Source: AAII

ORIGINAL FORMULA: Foolish Small Cap 8 Screen

S. No.

CONDITION

VALUES

1

TTM Sales

Lesser than or equal to $500 million

2

TTM EPS Growth

Greater than or equal to 25%

3

TTM Sales Growth

Greater than or equal to 25%

4

TTM Net Income Margin

Greater than or equal to 7%

5

TTM Operating Cash

Greater than 0

6a

Volume X Price last 3 months  Avg

Greater than or equal to $1,000 million

6b

Volume X Price last 3 months  Avg

Lesser than or equal to $25,000 million

7

Insider Ownership

Greater than 10%

8

Price

Greater than $7

9

% Rank Relative Strength 52 week

Greater than or equal to 90

10

Not Listed on

OTC

VARIATION 1: This variation benchmarks the performance with the sector medians rather than a fixed percentage. So if the company is an outperformer, it will anyway exceed the sector median benchmarks.

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Disclosure: I have no position in the stocks discussed, and neither do I plan to buy/sell it in the next 72 hours. I researched and wrote this article. I am not being compensated for it (other ...

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Comments

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William K. 1 month ago Member's comment

Interesting but I am not sure just what to think.

Samantha Carter 4 weeks ago Member's comment

What do you mean?