MarketStars – A user's guide

So how does this all come together? We have put together case-studies on beginner and more advanced investors and how they can make use of this market-leading product.

Case Study A - Nick, a beginner investor

Nick is new to stock screening but knows that he wants to find companies exhibiting strong earnings growth.
  1. Nick starts by visiting the Screener tool, and selecting one of the Popular Strategy Screens to try and learn more.
  2. Nick reads the quick introductions to choose some of the Popular Strategy screens, to understand how the criteria were chosen and what sort of investor these apply to.
  3. After reading up on a few Popular Strategies, Nick decides that he would prefer to build a custom strategy using the Screening Wizard. Now that he's a little more familiar with some of the terminology, it takes him less than a minute to answer all of the questions that the Wizard asks.
  4. Now that the Screening Wizard has built Nick a personalised strategy, he decides to take a closer look at some of the companies that meet his criteria to see if there are any familiar names.
  5. A quick browse at the results tell Nick that most of these are high street brands he knows of, and is comfortable with. Now he decides to put his strategy to the test and compare it against a few years of historical market data. He clicks on the 'Test Strategy' button to see the results.
  6. Lucky for Nick, his selected strategy has outperformed the market over the last 5 years by more than 20%. Nick quickly saves his strategy so that he can come back to it again in the future.
  7. Finally, Nick decides that he wants to know when new companies meet his criteria, so he can spend some time researching them. To do this, he clicks on the 'Set Alert' button and selects to receive an email once a week with updates.

Case Study B - Ian, an experienced investor

Ian is an experienced investor and is familiar with using stock screeners to find the sort of companies that interest him.
  1. He straight away logs into the Screener home page and sets about building his own strategy. Ian bases his strategy on companies with persistent earnings growth that pay a good dividend.
  2. Next, Ian spots that one of the Popular Strategy Screens is also based on growth. He clicks on the red information circle, and starts to read an analytical article on Growth Investing that explains the theory in detail and gives samples of practical criteria. Ian decides to give this strategy a try.
  3. Ian clicks on 'Test Strategy' and is taken to the results summary page to see how his strategy performed over time. The growth screen has produced very high returns over 5 years, but Ian prefers to invest for shorter periods of time so would like to see more specific information.
  4. Ian heads to the Settings page, restricts his test to just the past two years, and runs his test again.
  5. Returning to the Results Summary Page he finds that the results over the most recent two years are understandably less than the overall five year compound return but as Ian is only interested in the past two years, this serves as a better guide.
  6. Reassured that the strategy produces, on average, good positive results Iannow decides to put his custom strategy to the test and compare the two. This will help him to identify the specific criteria that can make a difference when it comes to his bottom line.

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