How does the Faith-Based Investor stock screener choose stocks?
We start with a list of companies that make it through our moral screening process. We screen out companies that are flagged in violation of the corporate practices, product line-up or industry involvement. We rely on several third party research providers to determine if a company y passes or fails our moral screens. Once it passes the moral screens, we use the latest financial data and research to determine which companies are best positioned for long-term appreciation. Over the last 30 years we have seen many studies that demonstrate that “value” strategies-such as buying stocks with low price/earnings (P/E) ratios can outperform the market averages. Thus Faith-Based Investor screens for stocks with low P/E ratios (“cheap stocks”) that also achieve high returns on capital (“good companies”). We then make some slight accounting adjustments to these commonly used ratios in order to be more accurate for comparison purposes across various companies.
