We’ve talked about the various ways that our SFTW Investor application can help you explore new ground in sectors and industries. Today, we’re taking a temperature check by using the Sector Safety Score indicator page to explore what sectors and industries are showing strong indicators for long term growth.
Our data changes daily, so this is a snapshot for the summer of 2016 – safety scores could change quickly, so be sure to add stocks to your watchlists in the application so you can monitor changes.
Looking through our entire database, there are currently six industries across three different sectors that have safety scores over 80 (99 being the highest score possible). Let’s take a look at these sectors as a great example of what to look out for when exploring the stock market. Here’s the page we’ll be referring to when researching safety scores:
Located under the SFTW Investor main menu, “Safety Scores.”
The technology sector has the highest average sector safety score of all of our sectors, with an average score of 62. You might think that seems low (the lowest is Utilities, at 23), but keep in mind that the sector includes every stock, so you would expect the average to land somewhere in the middle of our range of 1-99. This particular industry slips into the top of the industries scores because this industry has very few companies. This is a great example of how our application can help you spot quickly undiscovered undervalued stocks in our larger database; of course, if (for example) Processing Systems & Products is not familiar to you, you’ve now got a jumping off point to do your due diligence before making an investment decision.
Technology also has another high-rating industry – and considering that many technology industries rely on circuit boards as a component of their manufacturing gives this industry long term strength. The top 3 stocks in the Printed Circuit Boards industry all have safety scores at/above 95! This is a great example of how you can dig deeper to find and research strong stock opportunities in a sector that is overall strong, and typically priced at a premium accordingly.
Again, it is no surprise to see consumer goods – a very popular sector for investors – to lead the way with strong industries. This sector has companies across the full spectrum of safety scores, but the sector itself has an average rating of 38, serving as a reminder that just because it’s a popular sector doesn’t mean all the stocks are a great choice. All of the top 3 companies in Recreational Goods, Other have great safety scores. Also interesting, if you look at the individual stocks in this industry, you’ll notice the Buy/Sell/Hold timing signals (indicated as red/green dots on the stock chart) all look quite similar.
Electronic Equipment includes one of the highest rated stocks in our database, Sony (SNE – score 98) as well as other very highly rated stocks. What I like about this example is that you can find companies similar to popular stocks. If you’re looking for popular stocks, we have a push button portfolio for that, but we also have a diversified push button portfolio if you want stocks that aren’t well know but undervalued.
The Appliances sector is another great example of an industry with a strong popular stock but several other undervalued stocks. It was a neck-and-neck with safety scores of the above industry, so I wanted to share it as a second opportunity to exploring popular sectors for investing opportunities.
Last but not least, I love that this particular industry made our top list of industries with a score over 80, because this is a good reminder that boring industries can be a great place to look for undervalued financial investment. The industrial goods industry has a lower average safety score of 42, but the Cement industry has a few strong individual stocks leading the way that are good options to investigate.
As you explore the sections of our applications, don’t forget to add potential stocks of interest to one of your watchlist(s) so you can monitor them and take action appropriately. Always do your own due diligence and invest wisely.