Enterprising Investor Forum

Screenig for Best-in-Class Thursday, September 6, 2007

Sometimes, we like to try and highlight strong players in a specific industry and not only search for interesting companies across the board. In order to do this – again, using MSN Money Deluxe Stock Screener – we ran a simple search using criteria against the respective industry average.

We screened for:

• Return on Equity >/= to Industry Average Return on Equity
• Price/Book </= to Industry Average Price to Book
• P/E Ratio </= to Industry Average P/E Ratio
• Income per Employee >/= to Industry Average Income per Employee
• Inventory Turnover >/= Industry Average Inventory Turnover
• Debt to Equity Ratio </= Industry Average Debt to Equity Ratio
• Dividend Payout Latest Fiscal Year >/= Industry Average Dividend Payout Latest Fiscal Year
• Net Profit Margin >/= Industry Average Net Profit Margin

And finally, we checked if any company that met these criteria was being punished by the markets:

• Previous Day’s Closing Price ‘Near’ 52-Week Low

To further refine the screen, you can focus on Small, Medium or Large Caps, you can look only at a specific index like the s&P500 or any other angle you wish to explore.

What we found interesting was that one of the companies that companies that come out in the Top 5 was Precision Drilling Trust (PDS). We have been following this company for quite some time and even wrote about it back in June (to read our post please click: here).

Our outlook remains positive, they are paying a very generous dividend and as soon as conditions will become colder, we will see the share price gaining ground once again.