One of the most powerful tools in the business journalist’s kit is the stock screen. Whether a reporter is just starting out or deep into a long career, screening can help him or her uncover surprising stories quickly and systematically.
The idea is simple. Start with a thesis about where the market is headed and why (a well-reported educated guess will do). Then, take the broad universe of stocks and, using software (free or fancy), filter those stocks through a set of parameters that mirror the thesis.
For example, a reporter who supposes the European debt crisis is about to be resolved might screen for European banks that took a beating over the last year in order to find stocks that could be ready to rebound.
Each year, the Columbia University Graduate School of Journalism runs a stock screening contest. Each student in the school’s M.A. seminar in business journalism writes a stock screen column, and each of their stocks is purchased in a fantasy portfolio using MarketWatch’s Virtual Stock Exchange. At the end of the semester, the student whose stock has earned the highest return is declared the winner.
This year’s winner was Hunter Smith, who screened for a utility because he predicted a bearish market ahead. (Utilities tend to perform better during periods of uncertainty.) Hunter landed on Sempra Energy (SRE), a California-based energy company that appreciated despite a stagnant market. From the start of the contest on March 5 through its end on May 8, Sempra climbed 9.9%, outperforming the S&P 500 (-0.4%) and every stock in the fantasy portfolio but one. Prof. Jonathan Nee’s stock, Town Sports International, climbed 20.1%, but as a professor, he was not eligible to win the prize.
Here’s a look at the class’s portfolio and how each stock did:
Prof. Jonathan Knee – Town Sports International (CLUB) (+20.1%)
Hunter Smith – Sempra Energy (SRE) (+9.9%)
Sun Huixia – VanceInfo (VTI) (+6.1%)
Yingqiao Cheng – TransGlobe Energy (TGA) (+3.4%)
Julia Leite – Southern Copper (SCCO) (+6.1%)
Lauren Darm – Teva Pharmaceuticals (TEVA) (-1.7%)
Veneta Nikolova – Rackspace (RAX) (-3.3%)
Nish Amarnath – Cisco Systems (CSCO) (-5.3%)
Michael Obernauer – Wynn Resorts (WYNN) (-6.3%)
Liudmila Blagonravova – Energy XXI (EXXI) (-8.2%)
Nathalie Pierrepont – China Automotive Systems (CAAS) (-10.8%)
Peter Vanham – Barclays (BCS) (-17.6%)
Andrea Hayley – Caterpillar (CAT) (-14.2%)
Nizar Manek – Cobalt Energy (CIE) (-26.6%)
Prof. James B. Stewart – Petrobras (PBR) (-28.9%)