The Daily Workshop Report
by Robert Sheard (TMF Sheard)

LEXINGTON, KY. (Sept. 9, 1997)

Scroll to the bottom for year-to-date Growth and Value Screen results.

Not surprisingly, last week's series of columns about using Relative Strength as a screen for large-cap stocks generated quite a bit of interest. (Most people's ears perk up at the thought of a long-term strategy with low turnover that might generate whopping returns.)

But some readers wondered what would happen if we opened up the field beyond the large-cap stocks listed in the Value Line universe. One possibility to add a few more names to the list, but still not dip down too far in the market-cap rankings, would be to use an index like the S&P 500 as the first screen. With the huge interest in index funds these days, there may be an added liquidity benefit as retirement money continues to flow into them.

That aside, I ran screens using the S&P 500 stocks similar to the screens I mentioned last week. (The Value Line database includes 491 of the S&P 500 stocks.) Using those 491 stocks, I screened for all stocks with Timeliness rankings of either 1 or 2 and then sorted by total return over two periods: 6 and 12 months.

Here are the top 15 stocks based on those two screens.

Sorted by 6-Month Total Return:

Navistar Int'l (NAV)
Dell Computer (DELL)
Compaq Computer (CPQ)
Applied Materials (AMAT)
Data General (DGN)
Adolph Coors (ACCOB)
Sun Microsystems (SUNW)
Unisys (UIS)
Nordstrom (NOBE)
Helmerich & Payne (HP)
Aeroquip-Vickers (ANV)
Computer Associates (CA)
US Airways Group (U)
Warner-Lambert (WLA)
Progressive Corp. (PGR)

Sorted by 12-Month Total Return:

Dell Computer (DELL)
Applied Materials (AMAT)
Data General (DGN)
Compaq Computer (CPQ)
EMC Corp. (EMC)
Navistar Int'l (NAV)
Texas Instruments (TXN)
Intel (INTC)
Owens-Illinois (OI)
Warner-Lambert (WLA)
PACCAR (PCAR)
Microsoft (MSFT)
Cummins Engine (CUM)
H.F. Ahmanson (AHM)
Conseco (CNC)

Whether such a screen would work better or worse than the screens I wrote about last week is impossible to predict. But if you're interested in looking at the S&P 500 stocks more closely, the Standard and Poor's site on the web lists all of the Index components and posts regular notices of changes to the indices. Fool on!

Monthly Growth Screens
(Jan. 3 to present)
78.88%  Relative Strength  
34.24%  Investing for Growth  
24.82%  S&P 500 Index  
23.51%  EPS Plus RS  
21.97%  YPEG Potential  
20.04%  Low Price/Sales  
17.76%  Unemotional Growth  
14.21%  Formula 90  

Annual Value Screens
(Jan. 1 to present)
25.18%  Dogs of the Dow  
21.77%  Dow Jones Ind Avg  
20.58%  Dow Combo  
19.69%  Beating the S&P  
19.21%  Unemotional Value  
19.21%  Beating the Dow  
12.32%  Foolish Four