The human brain is hard-wired to hold on to negative ideas and events more than positive ones, which can manifest itself in investor behavior, explains Validea CEO John Reese in a recent article for Forbes.
Reese cites comments by different market experts that advocate patience and warn against “knee-jerk” investment decisions. Using stock screening models he developed based on the philosophies of such investing gurus, Reese identifies the following high-scoring stocks:
- PC Connection (CNXN), a provider of a range of information technology solutions, earns high marks for persistent growth in earnings-per-share and a favorable price-sales ratio.
- Alimentation Couche Tard (ANCUF) is a Canada-based company engaged in the convenience store industry. The company scores well based on the ratio of price-earnings to growth in earnings-per-share (PEG ratio).
- Dow Chemical Co. (DOW) manufactures and supplies products used primarily as raw materials for customer products and services. The company is favored for its cash flow-per-share, trailing 12-month sales and dividend yield.
- American Outdoor Brands (AOBC) manufactures firearms and provides accessory products for the outdoor enthusiast, and earns high marks for its earnings yield, PEG ratio and favorable debt levels.