Screening on Equity per Share
and Equity per Share Growth

In the last issue we covered the idea of "growth in net income". If the company's revenue is constantly growing it shows good company health. The same concept could be applied by looking for growth in equity. In this case we will be specifically looking at the company's equity per share and the ratio of growth between the last two reported values. By looking at equity as well as net income we can get some idea if the company is spending it's income on new assets or not.

Looking for equity growth per share can be done with the following screen (it is important to alter/experiment with the value of the conditions based on your trading goals).

In this screen I have chosen six values to limit my search results. I have used a minimum equity per share of 1 cent in the last two years. Including a minimum value ensures only reporting companies are returned in the search results. Also, a high equity per share ratio, 200% ( or 2 times ) equity per share growth in the last 2 years is included. A close range is important in this case since we do not want indexes or small caps - a range between 5 and 20 should return some affordable stocks.

I have also sorted the results based on highest volume. On the StockScreener you can sort the results by clicking on any of the column headers. Since I only am looking at equity per share, I want the heaviest traded companies to compare.

(Note: the results were sorted by highest traded volume)

For this screen we will only look at a few chart examples.

Example: List Result #1:

In the case of Schwabs (Charles) Corp. (the balance sheet date was last reported on 2004-09-30) we see a pattern on declining revenue, increasing net income, an increase equity over last 2 years, and a decrease in equity in the last 3.

Year 1 Net Income (millions) 472.00
Year 1 Revenue (millions) 4087.00
Year 1 dividend 0.05
Year 1 earnings per share 0.35
Year 1 equity per share 2.56

Year 2 Net Income (millions) 97.00
Year 2 Revenue (millions) 4135.00
Year 2 dividend 0.04
Year 2 earnings per share 0.07
Year 2 equity per share 0.55

Year 3 Net Income (millions) 78.00
Year 3 Revenue (millions) 4353.00
Year 3 dividend 0.04
Year 3 earnings per share 0.06
Year 3 equity per share 2.58

Example: List Result #3:

In the case of Kroger Co. (Supermkt/convenience stores), the balance sheet date was last reported on 2004-11-06. This company did not report equity per share in year 3. Over the last three years this company has shown an increase in revenue, a decrease in net since last year and a large equity gain since last year. Similar high/low pattern as well which makes this company a good potential for swing traders.

Year 1 Net Income (millions) 314.60
Year 1 Revenue (millions) 53790.80
Year 1 dividend
Year 1 earnings per share 0.42
Year 1 equity per share 1.18
Year 1 high 19.6700
Year 1 low 14.6500

Year 2 Net Income (millions) 1233.10
Year 2 Revenue (millions) 51759.50
Year 2 dividend
Year 2 earnings per share 1.56
Year 2 equity per share 0.36
Year 2 high 19.7000
Year 2 low 12.0500