What is a stock to hold for 1 year

Screening Filters

1. Price-to-Earnings Ratio (P/E TTM) ≤ 20:

   • Purpose: To identify stocks that are reasonably valued or undervalued relative to their earnings.
   • Rationale: A P/E ratio below 20 is often considered a benchmark for stocks that are not excessively overvalued. This ensures that the selected stocks are priced reasonably, which is important for a 1-year holding period as it reduces the risk of overpaying for a stock.

2. Revenue 5-Year CAGR (Compound Annual Growth Rate) ≥ 10%:

   • Purpose: To focus on companies with strong and consistent revenue growth over the past five years.
   • Rationale: A revenue growth rate of at least 10% indicates that the company has been expanding its business steadily. This is a positive indicator for future performance, making it more likely that the stock will perform well over the next year.

3. Dividend Yield (TTM) ≥ 2%:

   • Purpose: To include stocks that provide a reasonable level of income through dividends.
   • Rationale: A dividend yield of at least 2% ensures that the stockholder receives some return even if the stock price does not appreciate significantly over the 1-year holding period. This adds a layer of stability and income potential to the investment.

4. Beta: Moderate Risk:

   • Purpose: To select stocks with moderate volatility compared to the overall market.
   • Rationale: A moderate beta indicates that the stock is neither too volatile nor too stable. This is suitable for a 1-year holding period, as it balances the potential for reasonable returns with manageable risk.

Why Results Match:

• The filters collectively aim to identify stocks that are fundamentally strong (reasonable valuation and consistent revenue growth), provide income through dividends, and have a balanced risk profile. These characteristics align well with the goal of holding a stock for one year, as they reduce the likelihood of significant downside while offering potential for moderate upside.
• By focusing on moderate-risk stocks with solid financial metrics, the screener avoids speculative or overly volatile stocks, which may not be suitable for a relatively short holding period like one year.