The Snapshot Opportunity Score is my proprietary formula for assessing the purchase timing of a stock. It’s a great technical indicator to see if a stock is ripe for purchase compare with others in its sector or my list. It’s not a score that identifies the long term value of a stock as that decision relies on a thorough evaluation of the business. Once the stock is on my list, it has passed my evaluation for a future consideration.
Investing can be quite simple in a way. I have a list with list of companies I would be happy to own and I just ignore all the thousands other companies. I use mySnapshot Opportunity Score to identify the stocks priced right while focusing on the sectors I need to buy into based on my diversification criteria.
Related: Managing the list
I use mySnapshot Opportunity Score to help assess the purchase timing of a company. As you probably know, I manage a list of stocks in a spreadsheet with all the live Google data updating the score continuously. It’s really simple once it is setup. I even shared a Google Spreadsheet Template.
Related: How To Screen Dividend Stocks
The Snapshot Opportunity Score
I don’t have a problem sharing the simple formula thus giving away my proprietary concept. Finding the right numbers is where the magic is. What I have realized over time is that you cannot have number targets that are too aggressive because you eliminate a lot of options. Some numbers also need to be in line with the sectors so the target in some cases is based on sector averages.
I do have historical data for dividends and EPS and in reality, it’s often what you pay for since it’s a manual process and a bit time consuming.
The Technical Ratios:
- P/E : Relative strength compared with sector.
- 52 Week Range : The lower in the range the higher the score for an entry point
- Yield :Relative strength compared with sector.
- Payout Ratio : Compared against 10 year average when available
- Market Cap : Bonus multiplier with a target of $20B or more (+/- 10%). I normalize it between 0.9 and 1.1 and use that to multiply my previous total of the first 4 criteria.
- Dividend Aristocrat Multiplier : A dividend aristocrat receives a multiplier for its historical performance.
- Dividend Growth: 10 year tracking
- EPS Growth: 10 year tracking
Readers: How do you find your next purchase?