It All Starts with a Watchlist

What is a Watchlist?

Every buy-and-hold investor, whether a beginner or someone who is very experienced, needs a watchlist. A watchlist is simply a list of stocks that you are interested in owning. Maybe you don’t have much cash right now, or you feel the shares are too expensive. If you have a watchlist, then when those circumstances change, you can act quickly. 

How Do You Get Started with a Watchlist?

Do you love Starbucks coffee? Do you shop at Costco religiously every Saturday afternoon, and at Home Depot on Sundays? Is your 25-year-old Stanley Black & Decker drill the greatest tool you’ve ever owned? And are the perks on your JP Morgan Chase Sapphire Preferred credit card so awesome you get a free flight every year? Corporations that make products and provide services that you already know and love are a good place to start. Add a few of these companies to your list, and you are on the way. 

Another way to get started is to do some reading on various investing websites. What are analysts recommending? As you read, do you understand the case they are making and agree with them? If so, then maybe that ticker should go on your list. But if you don’t really know what they’re talking about, it’s usually best to move on to something else. It’s possible they are giving bad advice, or that you need more experience before buying that stock. Either way, it’s probably not for you right now.

What Objective Criteria Should You Use for Inclusion on Your Watchlist?

schwab.com

Once you have some experience with investing, you will find that you gravitate towards stocks with particular characteristics. Perhaps you really like dividend-paying stocks, or stocks that have recently IPO’ed and have a unique and powerful idea. Or maybe diversification is important to you, and you want to include stocks from each sector and/or with various market caps. Or you may believe that renewable energy is about to take off, so you want to invest in stocks that will benefit from that trend. 

These are all reasonable inclusion criteria; but in every case, QUALITY is the most important characteristic of all. What are some criteria you can use to identify quality?

toppng.com
  • Earnings – you want to be sure your company is making money, not losing it. Earnings per share should be greater than 0. An exception could be made for very new (and thus very speculative) companies. And any company may have negative earnings now and then; but you want to see positive earnings for most quarters.
  • Earnings Growth – the best companies not only have positive earnings each quarter, but those earnings grow over time. These are companies that are capturing additional market share, expanding into new markets, and offering new and improved products and services. 
  • Free cash flow – companies with good free cash flow are able to service their debt, pay dividends and/or buy back shares, pay bills, and survive economic downturns.
  • Low debt-to-equity ratio Companies with too much debt can struggle when times are tough. How much debt is too much depends in part on the interest rate environment. When interest rates are high, I personally like debt to equity to be no more than 80 – 100%. But in low interest rate environments, it sometimes makes sense for companies to take on more debt. For example, a company may need to raise some capital to launch a new product. They can either issue more shares, or borrow the money. If this company pays a 4% dividend, but can borrow at 3.2% interest, borrowing may be the better (cheaper) choice. Recently, because of low interest rates, and because the coronavirus pandemic motivated a lot of companies to borrow so they would have plenty of cash available during uncertain times, I’ve been using 150% or even 200% as the upper limit for this ratio. 
  • Profitability – there are several metrics you could use. Here are 3 common ones.
    • Return on Equity is net income divided by shareholders equity. A high number indicates the company is using that equity efficiently.
    • Return on Invested Capital measures the efficiency of capital expenditures. If a sawmill buys a new saw for the purpose of increasing output, how did that capital expenditure impact cash flow and earnings? 
    • Net Margin is net income divided by total sales.

In addition to quality, some investors may only want to include companies with good ESG (Environmental, Social, Governance) scores. 

There is an almost infinite number of criteria you could use, but the ones mentioned here would give you a good start. While you do want to limit your list, don’t be too exclusive. The watchlist needs to be flexible.

How Many Stocks Should You Have on Your Watchlist?

There are more than 4300 stocks trading on US exchanges. If you add stocks from Europe, Asia, and other regions, that number approaches 20,000. 

The watchlist is a curated list of companies, created by you for you. Recommendations I’ve seen for the optimal number of stocks on the list range from 20 to 200 and the actual number depends on your personal preference. My own preference is between 150 and 250. Yours may only be 12 or 15. It depends on how much time you have available for investment activities, how many stocks you ultimately want to own, and how loose or tight your quality criteria are. Whatever number you start with, it’s likely that your list will grow over time.

So What Am I Watching for on My Watchlist?

You have a lovely list of good quality stocks that are interesting to you. Now what? As always, the answer may vary depending on what type of investor you are. Here are some possibilities:

  • A good entry price – value investors don’t want to overpay for a stock. They will wait for the share price to dip. Those dips can happen for a variety of reasons: the market as a whole may be down, or the sector is out of favor. Maybe the company had one bad earnings report and the market soured on the company, but you believe it is a temporary problem. These scenarios present a buying opportunity and you are ready to take advantage. On the other hand, a lawsuit, an SEC violation, or company guidance that indicates a few rough years coming up can cause the share price to dip, but may also mean the company is of lower quality than you previously thought. You should try to figure out the cause of any significant dips before you proceed. (In a future article I hope to cover valuation criteria you can use to determine a good entry price.)
  • Relative Strength Index (RSI) – different investors use RSI in different ways. As a value investor, I often use it to time stock purchases. Buying when the RSI is low (perhaps when it is between 25 and 45) will often result in a nice pop in stock price just after you buy. No guarantees of course. A low RSI can also indicate a stock that is highly distressed and to be avoided, so it is especially important to ensure you are looking only at high quality stocks when using the RSI.
  • Attractive technical indicators – any technicals that indicate the price is about to go up can be interesting. Buy and hold investors don’t usually rely on technicals too much, but even they enjoy stocks that go up in price just after they buy them. Swing traders are more likely to enter a new position based on attractive technicals.

Using MarketXLS with Your Watchlist

With MarketXLS, you can put your list of tickers in an Excel spreadsheet and then add various quality and valuation criteria. Every time you open the list, simply refresh it and you can see quickly which stocks are good choices right now.

Here’s an example of what this might look like:

I entered tickers in column A and then asked Market XLS to bring in the information in all other columns. Yellow columns are basic info, blue columns are some of the quality criteria discussed in this article, and green columns are a few of the possible valuation criteria you could use.

I’m not recommending for or against any stocks, but when I looked at this list, I see 2 that bother me. HD has a very large amount of debt and a negative ROE over the past 12 months and SBUX has a P/E of 131 which is VERY high, and also has a negative earnings growth rate. I like these companies, but those types of problems take a while to resolve. Maybe I’ll create a 2nd watchlist, kind of a “Not Now, Maybe Later” list, and move these 2 stocks there. DAL’s debt, cash flow, and ROIC also look worrisome, but I believe this is entirely due to the pandemic’s impact on the travel industry. I personally believe the pandemic will resolve and DAL will be profitable again.  On the other hand, KBH, FDX, and AAPL look like reasonable choices at this moment in time. That could all change tomorrow of course! And if it does, I will know all about it because of my watchlist and MarketXLS.

Disclaimer

None of the content published on marketxls.com constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

The author is not offering any professional advice of any kind. The reader should consult a professional financial advisor to determine their suitability for any strategies discussed herein.

The article is written to help users collect the required information from various sources deemed to be an authority in their content. The trademarks, if any, are the property of their owners, and no representations are made. All trademarks referenced are the property of their respective owners. Other trademarks and trade names may be used in this document to refer to either the entity claiming the marks and names or their products. MarketXLS disclaims any proprietary interest in trademarks and trade names other than its own or affiliation with the trademark owner.

Verelq News |
21.04.2024

alexistogel macau

alexistogel

link alexistogel

situs alexistogel

alexistogel rtp

situs alexistogel

link alternatif alexistogel

alexistogel gacor

bandar alexistogel

alexistogel

alexistogel

alexistogel terpercaya

alexistogel gacor

alexistogel

alexistogel 4d

alexistogel

alexistogel

alexistogel gacor

alexistogel terpercaya

agen togel online

link alexistogel

alexistogel toto

alexistogel

alexistogel rtp

situs alexistogel

bandar alexistogel

alexistogel

link alexistogel

alexistogel

alexistogel togel slot

alexistogel

alexistogel online

alexistogel

alexistogel gampang menang

alexistogel 4d

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

alexistogel

slot gacor alexistogel

شرط بندی پرسپولیس شرط بندی استقلال شرط بندی روی تراکتورسازی تبریز شرط بندی روی سپاهان شرط بندی رئال مادرید بارسلونا شرط بندی شرط بندی psg سایت شرط بندی جام جهانی شرط بندی جام جهانی 2026 سایت شرط بندی جام جهانی 2026 بازی انفجار رایگان سایت انفجار ضریب بالا بهترین سایت شرط بندی فارسی شرط بندی بدون فیلتر شرط بندی بازی رولت شرط بندی پوکر شرط بندی مونتی شرط بندی سنگ کاغذ قیچی شرط بندی بلک جک کرش رویال بت پاسور شرط شرط بندی تخته نرد آنلاین انفجار 2 بت شرط بندی بازی اسلات شرط بندی بازی پوپ سایت سامان بت ریور پوکر 2024 سایت 4030bet ورود به بازی انفجار دنس بت شرط بندی انفجار دنس آموزش بازی پوکر سایت شرط بندی 123 بهترین شرط بندی بهترین سایت شرط بندی انفجار اپلیکیشن بازی انفجار دانلود بازی انفجار انفجار بازی ربات بازی انفجار کازینو آنلاین ایرانی انفجار پولساز ورود به بازی انفجار بازی انفجار با شارژ 10 تومن سایت bet betyek وان ایکس برو آدرس سایت بت یک سایت دوست دختر اونلی فنز فارسی پیدا کردن دوست دختر ورود به ریور پوکر پدرام مختاری پویان مختاری نازنین همدانی مونتیگو داوود هزینه بیوگرافی آیسان اسلامی بیوگرافی دنیا جهانبخت سایت رسمی حسین تهی بیوگرافی کوروش وانتونز سایت آرتا وانتونز رها وانتونز بیوگرافی ربکا قادری سحر قریشی بیوگرافی تتلو بیوگرافی مهدی طارمی الناز شاکردوست سایت عادل فردوسی پور بیوگرافی نیلی افشار بیوگرافی محمدرضا گلزار سایت armin2afm بیوگرافی شادمهر عقیلی بیوگرافی سردارآزمون بیوگرافی علیرضا بیرانوند بیوگرافی رامین رضاییان وریا غفوری بیوگرافی علی دایی بیوگرافی پوریا پوتک مدگل سایت حصین بیوگرافی صدف طاهریان فرشاد سایلنت بیوگرافی آریا کئوکسر بیوگرافی sogang بیوگرافی میا پلیز بیوگرافی مهراد هیدن سایت رسمی سهراب ام جی بیوگرافی علیرضا جی جی بیوگرافی بهزاد لیتو اشکان فدایی بیوگرافی رضا پیشرو بیوگرافی گلشیفته بیوگرافی هیپ هاپولوژیست بیوگرافی سارن بیوگرافی آدام مرادی بیوگرافی محمد هلاکویی بیوگرافی علی حسنی سایت رسمی علی حسنی بیوگرافی ساسی خواننده بیوگرافی ابی باربد معصومی حسینی فایننس بیوگرافی امیرحسین نام آور بیوگرافی امین فردین بیوگرافی فرزاد وجیهی سایت سیب بت سایت jetbet آدرس جدید بت فوروارد وان ایکس بت سایت abt90 بازی انفجار سایت شرط بندی فاز بت بهترین سایت شرط بندی انفجار ورود به آلپاری آلپاری فارکس آدرس بروکر آلپاری بدون فیلتر ثبت نام در بروکر آلپاری فارسی صرافی کوکوین ربات فارکس بهترین سایت تتر

alexistogel toto online

bandar alexistogel

alexistogel bandar gacor

alexistogel link

alexistogel online

alexistogel bandar togel

link alternatif alexistogel

alexistogel

alexistogel

alexistogel

alexistogel daftar

alexistogel toto macau

alexistogel bandar macau

alexistogel slot

alexistogel agen slot

alexistogel

situs alexistogel

alexistogel

alexistogel slot

alexistogel

alexistogel

alexistogel

alexistogel bandar slot

alexistogel

Alexistogel Toto Macau

alexistogel

bandar alexistogel

alexistogel slot

alexistogel link alternatif

alexistogel macau

alexistogel

alexistogel toto macau

slot alexistogel

alexistogel bandar togel

alexistogel

alexistogel rtp

alexistogel

alexistogel slot

alexistogel

alexistogel

alexistogel

alexistogel terpercaya

daftar alexistogel

alexistogel online

rtp alexistogel

alexistogel slot

alexistogel gacor

link alternatif alexistogel

alexistogel login

alexistogel

alexistogel slot dana

agen togel online

bandar togel online

alexistogel rtp

alexistogel slot

alexistogel daftar

alexistogel daftar

slot online dana

bandar togel slot

togel online terpercaya

slot pragmatic gacor

link situs slot resmi

situs slot online

link daftar togel slot

bandar slot gacor hari ini

bocoran pola slot

situs slot online

bandar slot online

bandar togel online

slot online terpercaya

togel slot online

slot deposit qris

agen slot online gacor

rtp live slot online

bandar slot online

bandar slot online gacor

agen slot online

daftar bandar togel slot

bandar togel online

togel slot hari ini

link alternatif togel slot

rtp slot online gacor

slot online gacor

situs slot gacor

rtp slot gacor

slot online gacor

tips slot maxwin

togel slot gacor

prediksi togel

game slot gacor

trik slot online

prediksi togel jitu

game slot online

togel online terpercaya

daftar togel slot online

bandar togel terpercaya

slot online gacor

trik slot bonus

prediksi togel online

rtp slot online

panduan togel online

RTP LIVE

Bandar Toto Macau

Situs Slot Gacor

bandarbola855 resmi

bandarbola855 gacor

bandarbola855 slot

link bandarbola855

bandarbola855 bola slot

bandarbola855 rtp

bandarbola855 slot online

bandarbola855 link

bandarbola855 bandar

bandarbola855 slot terpercaya

bandarbola855

bandarbola855 slot

bandarbola855 terpercaya

bandarbola855 online

slot bandarbola855

bandarbola855 slot

bandarbola855 daftar

bandarbola855 link

bandarbola855

bandarbola855

bandarbola855

bandarbola855 slot

bandarbola855

bandarbola855 rtp

bandarbola855

bandarbola855

bandarbola855

iosbet

iosbet

link iosbet

slot online iosbet

iosbet link login

slot iosbet

iosbet gacor

iosbet slot

iosbet

slot iosbet

agen iosbet

bandar iosbet

iosbet

iosbet link

bandar iosbet gacor

iosbet

iosbet

iosbet

iosbet

liatogel

bandar liatogel

login liatogel

live draw hk liatogel

liatogel slot online gacor

liatogel totomacau

liatogel link

slot gacor

daftar slot online

bandar slot dana

slot ovo

slot gopay