MarketScan Article in SHARES Magazine 04/03
Keep it Simple, by Andrew Doig

Sometimes we make trading more complicated than it should be. A simple but highly effective trading strategy is identifying strong stocks in strong sectors...

Having found a strong stock in a strong sector, the next step is some simple fundamental analysis. Check the stock's dividend yield and price/earnings ratio (PER) to get some idea of its valuation. Look at the market capitalisation and average daily turnover - is there enough liquidity in the stock to make a trading strategy possible?... let a software program such as MarketScan do it for you...

But if you want an easy-to-use program that is great for running searches and filtering stocks, MarketScan is worth considering...

MarketScan comes with a generous selection of predefined searches ready to go. These cover the three main areas of the program - price criteria, volume criteria and fundamental criteria...

By combining fundamental and technical information, users can display and save important timing and qualitative data. You can search for and display information for ASX equities, loan securities, convertible notes, company options, warrants and exchange traded options.

With MarketScan, you can choose from a raft of predefined scans and tests, or create your own searches and watch lists at the touch of a button to identify which sectors of the market are moving and which sectors are not - and which stocks within the sectors are likely movers...

Importantly, MarketScan's search function lets users build their own searches and tailored lists, combining a large number of fundamental and technical criteria that can be saved for future analysis...

There are also powerful predefined searches that include creating watch lists instantly, fundamental profiles, screening abilities, and that can identify market trends and monitor stock performance

Technical and fundamental information is obtained via a detailed report on any company in the database. This gives an overview of the most recent financial information, covering security information (security description), company information (industry group and sub-group), price information, latest fundamental data (earnings per shares, asset backing), dividend details, price and volume studies.

The program can generate detailed searches or lists by utilising a combination of data from the fundamental and technical criteria list. There are more than 60 market data fields that can be refined and filtered for multiple conditions. Pre-defined scans have also been created to help users in the stock selection and analysis process. MarketScan comes with a number of pre-defined searches. For example, it can list stocks within 5 per cent of their 52-week highs while the low PER, high-yield search will find ordinary shares with a PER of less than 25 and a dividend yield greater than 4 per cent.

Good technical and dividend searches find stocks where the closing price is greater than the 50-day moving average, the one-year price change is greater than 10 per cent, and the dividend yield is greater than 4 per cent fully franked. These are just a taste of some of the search and sorting functions that MarketScan has.

This is a powerful and interesting market-scanning tool and relies on several criteria to list results. Providing these criteria suit a user's style of investing, MarketScan is worth considering.