Last two weeks I have been searching for a stock which would pass my new criteria and I would be able to open a new position. My screener has been shooting many candidates at me, but further screening blocked those stocks from buying them.
Recently I reviewed the following potential candidates for buying:
ACU; AKAM; BIG; BKE; BRCM; CMP; CPO; CSGS; DMND; DV; EDU; EMS; FSC; HGR; KED; MPAA; MWIV; OTEX; PETM; PTNR; TGI; THS; & TNK
All stocks were originally selected by my screener because of high Relative Strength (RS) and increasing institutional accumulation, however the next screening failed those stocks. They weren’t either trending properly or heavy insiders’ selling or didn’t pass screening of EPS, revenue, EPS growth etc.
Finally I was able to find a stock which showed on my screener and passed my further evaluation as a strong candidate: Devry (DV). It failed only in a few criteria such as insider selling, however since DV is a university I do not consider insider selling as a significant issue here. Also most of the selling was an option execution.
After DV passed my screening I calculated potential risk of the portfolio. Because this stock is quite expensive one the risk will be a bit higher initially. Nevertheless I decided to buy 12 shares of this stock as my initial position.
Why I am buying only 12 shares? By limiting the size of the position I am limiting my potential risk if the trade turns against me. If that happens I will lose only 52 dollars and my entire portfolio drops to $1998.26 of liquidation value and that is acceptable for me. I entered a buy order for tomorrow’s opening to buy 12 shares of Devry (DV).
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