PEG Stock Screening with Growth and Margin Filters

Summary

This document turns Peter Lynch’s PEG idea into a periodic stock-selection process for Chinese equities. It starts with companies in selected non-cyclical industries, then keeps the half scoring highest on net-profit growth and sales net margin. From that group, it ranks stocks by price-to-earnings ratio divided by annual basic-EPS growth and selects the ten lowest positive PEG values, subject to an upper growth-rate filter. The portfolio is reviewed every twenty trading days and adjusted to match the new selections; available cash is divided among new positions.

The article provides implementation logic but no backtest, performance results, or evidence that the filters predict future returns. Its PEG calculation depends on the reported growth measure and does not explain how to handle stale or missing fundamentals. The described allocation only divides cash among additions; it does not specify target weights for existing holdings, transaction-cost treatment, or broader risk controls. The approach is therefore a screening recipe rather than a validated investment result.

Key ideas

• The strategy begins with stocks from a predefined set of non-cyclical industries.
• It filters candidates using net-profit growth and sales net margin.
• It ranks the remaining stocks by positive price-to-earnings ratios divided by annual EPS growth.
• The example selects ten stocks and refreshes holdings every twenty trading days.
• The document gives no backtest or evidence of realized performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.