I’m Pat Rosenheim, a.k.a. the PandA Trader.
Every weekend, I like to look for new opportunities. One of the things I look for is past performance, in this case the past 200 days. I use the free PerfCharts on StockCharts.com for this purpose. I am well aware of the caveat that past performance is no indicator of future results, but it does give me an idea of how well the security has performed, especially since these charts also account for dividends. This means that Total Return is considered, not just just price appreciation or dividends alone. If you wanted to see how price has performed without dividends, you’d simply put an underscore before each symbol, like this;
_TICC, _OXLC, _SCM, _SAR, _BDCL, _MORL, _PSEC, _NEWT, _GAIN, _NRZ
The 2 charts look quite different!
Here’s the Total return;
Here’s the return without dividends, showing only price appreciation;
In the first chart with dividends, we can see returns between 25% and almost 60%. Remove the dividends, and the return is only between 14% and about 46%. So what does that mean?
Well, to me it means that without the dividends the returns are healthy, but they are really quite robust when you account for dividends along with the price appreciation. I like that.
One more thing to consider is that I am just using the default 200 day look-back period. It can, and probably should, be changed to analyze longer timeframes. But, for this exercise the default will suffice.
But that’s just a small part of the process that I use. To illustrate with a shortcut, I’ll use Louis Navellier’s Portfolio Grader which purports to also assess the fundamentals of each security. It needs to be noted that 3 securities were not graded;
The following symbols are not included in the nearly 5,000 stocks tracked by Portfolio Grader and will not be saved: OXLC, BDCL, MORL.
Portfolio Grader rates common stocks or ADRs traded on the NYSE, NASDAQ, or AMEX exchanges, and must be listed for at least 1 year. These companies must have traded more than 2500 shares over the past 20 days of trading and the most current price must be equal to or greater than $1. Spiders and other popular ETFs are not included in the database due to the lack of fundamental data in which to grade them.
But 7 out of the 10 were graded, so lets look at that;
There’s also this comment;
Excellent! This is an A-grade portfolio containing some of today’s best stocks. Keep a close eye on these companies to be sure they maintain their good-standing. And lastly, be sure you’re well diversified, it’s important not to overweight any one stock in your portfolio (no matter how good it is).
So, this is an A-grade portfolio then? Maybe, but I did take a shortcut so more research must be done, aptly named due diligence. For an explanation, we can turn to Investopedia. (click the link!)
Here’s a disclosure: I am currently long BDCL, MORL, PSEC, & TICC. I may or may not buy any of the other 6 in the next 90 days. But, at least I’m thinking about it, and I haven’t stopped searching. I’m in love with dividends! My “side piece” is capital gains. They actually get along very well together, at times.
PLEASE TAKE NOTE AND REMEMBER THIS!
I’m not telling anyone to buy anything or giving anyone any advice, because that’s illegal. You see, I have no letters after my name, like RIA, CFA, etc. I SIMPLY DO NOT GIVE ADVICE. I only tell (and show!) what I do. You, like me, are all alone in this.
And remember, always do your own due diligence!