Portfolio123 Stock
Screening Tools

Give your stock investment strategies the edge they deserve with Portfolio123 stock screening tools - screening, backtesting, multi-factor ranking and simulation coupled with institutional quality data.

Prior to the upgrade in 2012, this was probably the best stock screener available if you expected to back-test your investing ideas. The upgrade included

• Compustat data instead of Reuters data
  
• Hedging in the back-test
• Risk statistics for the back-test results

It has become the gold standard of stock screening tools.

Register to get started. That will get you a free trial - time to get acquainted with the system and decide if it is worth the fee. This gets you access to several Portfolio123 proprietary screens, proprietary ranking systems and, incredible as it may seem, historical data from January 2, 1999 for back-testing.

NOTE: Once you register you have access to the detailed explanation of why they switched to Compustat from Reuters.  Worth reading.

“Must Have” features

As always, the data requirements of your investing strategies are the primary consideration. Paying a fee only makes sense if the data you need is available.

Portfolio123 has over 500 fundamental, technical, and industry parameters available. It is hard to imagine not finding what you need but not every strategy will be supported. In addition, the majority of the data is not focused in any one area but spread across many categories.

On the "RULES" tab, screening criteria are entered with a point and click wizard or with a free form editor. Extra criteria can be specified but "locked out"; a useful feature during testing.

Below is the criteria entry for a demo screen (NASDAQ Little Dogs).

If you use more than simple data points, you will be pleased with the free form editor. You can enter a formula (an advanced feature) as complex as you can imagine using the company data, industry data, and the rich set of operators offered. Technical indicators are also available as criteria. In many ways, it is much like entering a formula or using a function in MS Excel.

In the example above, the only rule in play is Enterprise Value > 0. Notice that the P/S criteria has been entered but is currently "locked out". This is a useful feature when back-testing the effect of criteria on performance.

Desired markets and exchanges can be specified in the rules.

Use the SETTINGS tab to specify the additional characteristics of the screen. You can run the screen against a variety of stock universes such as the S&P 500 or the Russell 2000 if you are not interested in the entire database. In this example, the NASDAQ 100 was selected. And was also specified as the benchmark for back-testing.

But we could have used a custom universe. One of the advanced features included in Portfolio123 is the ability to create a custom universe or enter a custom list. The custom universe is dynamic and reflects the specified criteria at a point in time. Note, however, that custom lists may suffer from survivorship bias.

The SETTINGS tab is also where the ranking system is specified. One of the strengths of Portfolio123 is the inclusion of ranking systems. You can see on the screen shot above some of the pre-built systems offered. For more explanation, see Stock Ranking Systems.

Within any universe of stocks some stocks are better than others from an investment standpoint. And because every guru has a unique investment standpoint, many unique ranking systems are offered. Some of their ranking systems are value oriented; some are growth oriented; some are a combination of both.

These are multi-factor ranking systems. Like the public screens, the systems are transparent and can be modified and saved as your own.

The power of the ranking systems is that you can rank the results of your screen by any ranking system or by using the “Quick Rank” option. A quick rank is based on a criteria or formula entered on the SETTINGS tab.

In this example, the ranking system based on the investment philosophy of Piotroski was selected. This means each stock in the NASDAQ 100 will be ranked according to Piotroski's investment philosophy.

Finally, you can specify how many of the top ranked stocks to identify (another useful feature not found in many systems). Five stocks were specified.

Had a short system been desired, Method would be set to Short, not Long. Long/Short and Hedging are the other options. Yes, you can include hedging and market timing in your back-testing.

Saving a screen by name

After entering a screen – simple or complex – with the RULES and SETTINGS tabs,  you can save the screen by name. For example, NASDAQ Little Dogs.

NOTE: If you do not want to create a custom screen, Portfolio123 offers over 30 pre-defined screens and dozens of screens developed by their user community. Some of the screens are based on the published work of stock gurus like Warren Buffet, Martin Zweig, and Benjamin Graham. Some are based on general investing concepts.

The pre-defined screens are an excellent starting point for custom screens.

Viewing the results of your screen

Selecting "Run Screen" provides a list of passing companies which can be viewed on any of the pre-defined tabs or on a custom view. The filing date of the underlying data is available.

Is there anything else? Oh, yes, you can download the results to a spreadsheet along with any data points of interest for each result.

Written documentation is available online as are how-to videos. The documentation covers not just the screens and data, but the concepts of building screens.

Stock screener “Nice to Have” features

All of the nice-to-have features are available. Both industry relative and historical data points can be included in the logic. If an investing strategy calls for an industry relative comparison rather than an absolute value, the screener can handle it. Technical analysis criteria are also available.

Like most screeners, the results of the screen (as shown above) are provided as a list where each row represents a company that passed the screen. Not only can you look at all the data points independently of the screening criteria, you can sort the results by any view-able field.

Visualization of the results is excellent. For example, an icon that displays a Yahoo Finance price/volume chart (5 day or 1 year) of the equity. Other nice features:

• View/print a customizable report of the company
• View a snapshot of the available Compustat data
• Link to the company website

All these open in a new window. Very impressive.

As shown in the example, you can limit the results to a specified number.

The user forum is a great resource and the staff of Portfolio123 regularly participates in the forum.

Portfolio123 “Advanced” features

Custom formulas and advanced logic are included. You can create custom formulas within the criteria.

Portfolio123 offers no proprietary ratings but does offer several proprietary investing strategies and proprietary ranking systems. The strategies and ranking systems are transparent so you can see the criteria and modify them if you wish. As mentioned, screens, simulations and ranking systems developed by the user community are also accessible.

Backtesting

Have you ever wondered how your new idea would have worked over the past 16 years but never had the resources to find out? No need to wonder any longer.

The demo was back-tested in the screener for the period from January 1, 2009, through December 31, 2016.

The results and performance (the NASDAQ Little Dogs equity curve is shown in red)

You can back-test your investing strategies starting on January 2, 1999, with a click of a mouse button. And examine holding periods as short as a day or as long as a year.

You can back-test by applying any of the ranking systems.

You can include market timing and hedging in the back-test.

WOW.

Investment strategy simulations

One of the most striking advanced features offered by Portfolio123 is the simulator. This allows you to build a strategy with buy criteria (as you would in a screener) and sell criteria. The buy rules kick-in any time a sell occurs - just like you would do manually.

And you can back-test the strategy with these buy and sell rules.

And you can include hedging and market timing.

And you can turn the simulation into a portfolio and automate it so that each time it is re-balanced you get an email notification of any action required. It is even possible to have the trades executed through Interactive Brokers directly from the portfolio re-balance. See an example of a notification in Stock Screeners Advanced Features.

Implementing investing strategies

Your personal investing strategies and back-testing preference identify the data and logic needs of the best stock screener for you.

With Portfolio123 you can create an investing strategy with a screener and multi-factor ranking system, then implement it using simulation and automated portfolio management.

The NASDAQ Little Dogs are a variation of the Dogs of the Dow investment strategy discussed elsewhere on this site and illustrate how the Portfolio123 stock screener and back-tester can provide the confidence you need for an investment strategy.

Conclusions

If you intend to use a stock screener and get some feel about how your investing strategies have done in the past, this is the standard against which others will be measured. Take the free 15-day test drive (30 days if you register using the link below) – nothing ventured, nothing gained.

Once your trial is finished, you can decide what level of access is best for you. During your free trial, you will have access to 5 years worth of data for back-testing.

Four levels of functionality are available and determine how many investing models you can save, how much historical data you can access, and if custom simulations and ranking systems are permitted for strategy development. Access to Ready2Go investing models is available to all subscribers for an additional fee.

To examine the Portfolio123 in more detail, you can register for a 30 day free trial. During registration, if you must identify the referrer - from the drop down list select StockScreening101 . Registration gives you access to their forums.

NOTES:
Several versions of the Tiny Titans, CANSLIM and Piotroski strategies described elsewhere on this site (and the NASDAQ Little Dogs example used here) are available as pre-built or community screens on Portfolio123.Once you register, log in and go to the Community Screens area and search for the screens by name.

Once you register, you can contact me directly. My user name is Jim101.

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