Weekly Stock Screens

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Stock Screens

One of the things individual investors come to the Fool for is ideas. They want to know where to look for those darling small cap stocks that Fools the world o'er dote upon.

In this section, we will profile some screens to help you generate ideas for your portfolio. These are just lists of suggestions that, for the most part, have not received any further research. However, they make an excellent beginning for your own stock research journey. Just enlarge them to fill up your entire screen and presto! Ideas galore.

Two of these screens pick out companies that Missed or Beat analyst consensus estimates by 9% or more, listed both alphabetically as well as by descending percentages . The other two screens show you Rising and Falling margins.

What are margins? Margins are profit margins, operating margins and gross margins. All are measures of how much money a company keeps after it pays for different aspects of the production of a product. Gross margins tell you how much is left after you have paid for labor and materials. Operating margins tell you what is left after sales expenses, administrative salaries and expenses, and general non-production overhead. Profit margins (net profit margins) tell you what is left after all of those expenses, plus one-time losses or gains, interest expenses, income or losses from investments or subsidiaries, and taxes -- in other words, after ALL the bills have been paid.

When earnings increase faster than sales, it means that margins are rising and times are good. Companies that are increasing their margins tend to produce the best earnings over time.

When the opposite happens, look out below. Falling margins indicate that sales are expanding faster than earnings. These screens can show you companies whose stock might be overpriced. Falling margins normally mean slowing earnings, a great place to look for shorts.


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