I think I ran across one that I will check in more detail. At my first glace, it looks like it might be pretty good.
A lot of people rely on the Price/Earnings ratio, but this video shows an approach that relies on the Price per Cash Flow (Price/Cash Flow) metric instead.
Price/Cash Flow compares the stock price/share (market value/share) to the amount of cash flow/share.
We know that cash is VITAL for a company to maintain its operations. Plus, the price/cash flow is more difficult to manipulate "for the books" than the more popular price/earnings and many other measurements are.
Here is a video with Kevin Matras and Terry Ruffolo from Zacks.com that explains the scanning technique a little better:
Suggested Guidelines (according to the video)
Price/Cash Flow <> 40 yield (on average) -7% annually (That's NEGATIVE, folks!)
However, this video is careful to note that "good" Price/Cash Flow figures vary by industry. Make sure that you compare the figure from "your" company to others within its specific industry.
Screening Criteria: Price/Cash Flow
- Zack's Rank = 1
(This makes sure that only "Strong Buys" get through the filter.)
- 1-Year Projected Growth Rate >= S&P Average
(This seeks above-market growth rates.)
- Current Cash Flow >= 5-Year Cash Flow
(This ensures that the company's cash flow position is GROWING.)
- Price/Cash Flow <= Industry Median
(Make sure that it's a bargain within the industry, and the median avoids data figure skewing.)