Written by: Robert and Russell Markham
One of the best places to find stocks is to simply check out the Stock Viewer (per the Viewers tab on the main toolbar) and to sort the stocks by VST (to get the best combination of fundamentals and technicals). As of 13 April 2018, the top 3 VST ranked stocks were KGN.AX, A2M.AX and NEC.AX.
Another place I like to keep my eye on is the Model Portfolios and the current stock holdings. Simply head over to the Portfolios tab and check out the Model Portfolios and the current holdings. I can click through all the Model Portfolios in seconds and note all the stocks held in each portfolio. The 6 portfolios we currently track are: 10 Stock Model Portfolio, ETFs Portfolio, Growth Portfolio, Income Portfolio, Safe and Sure Portfolio and SMSF Balanced. You can see these all listed per the left-hand side.
Run through the portfolios and jot down the stocks held in each one. I am interested in finding the common stocks across the Model Portfolios. After quickly running through the portfolios and jotting down the stocks, I can see three stocks, NEC.AX, LIC.AX and CDA.AX, occur across several Portfolios. NEC.AX is held in the 10 Stock Model Portfolio, the Safe and Sure Portfolio and the SMSF Balanced. LIC.AX is held in the Growth Portfolio and the SMSF Balanced and CDA.AX is held in the Growth Portfolio and the Safe and Sure Portfolio. The most commonly held stock is NEC.AX across the three portfolios which, in turn, ties back to Stock Viewer which ranks NEC.AX as the third highest VST stocks. That tells you something.
NEC.AX was picked up by the 10 Stock Model Portfolio on 28 February this year, on 7 March this year in the Safe and Sure Portfolio and on 27 July 2017 in the SMSF Balanced. The SMSF Balanced was the early adopter of NEC.AX and as you can see per the equity curve over the years the SMSF Balanced has had a strong record at picking winners. If you click on the SMSF Balanced portfolio, then click on the Reports tab (per the top of the screen) and then select View Summary Report, you will see the overall win rate of this portfolio is just over 61%.
Let’s take a closer look at NEC.AX. Head over to the Viewers tab and locate NEC.AX. As of 13 April, NEC.AX had an excellent VST Score of 1.53 (on a scale of 0.00 – 2.00) depicting strong fundamentals and technicals. Note the fundamentals are very strong with RV at 1.68 and RS at 1.22. Note too that the Earnings Growth Rate (GRT) is a staggering 29%. If you scroll over further on the columns and locate Dividend Yield (DY) at a strong 4.44% with a strong Dividend Safety (DS) score of 66 out of 99 with the company looking to increase dividends, Dividend Growth (DG) at 12%.
If you graph NEC.AX and select Graph Layouts (per the top right of the graph) to be the VectorVest Simple layout. Notice the rising earnings over the last year along with the upward trend in the share price. As we have seen over the years, rising earnings are the engine of future price appreciation. You can add in the Value of the stock (per the right of the graph). This stock is well undervalued at present. I am watching this stock closely, I would like to see the next wave of earnings (EPS) take place and await the share price to start moving up strongly again.
Would I rush out and buy this stock now? The simple answer is no. Remember, we want to check Market Timing first before doing anything. We are currently in a Confirmed Down. As I am conservative, I will wait for the next Confirmed Up signal to take place on Market Timing. Once this takes place, I will revisit NEC.AX to ensure that all the key fundamentals and technicals are still to my liking.
For now, NEC.AX is on my shortlist. Thank you Stock Viewer and Model Portfolios for the heads up!