Screening by Relative Strength

Introduction

Relative Strength is a momentum strategy that helps you find stocks that consistently outperform a benchmark.

Stock Rover’s Relative Strength screener finds stocks with strong relative strength defined as consistent outperformance vs. the S&P 500 in all periods, ranging from the short term (5 days) to the long term (5 years). The screener checks for outperformance vs. the S&P 500 in the intervening periods as well, including: 1 month, 3 months, 6 months, 1 year, and 3 years. The longer the period, the more the outperformance must be to pass this screener.

We’ll start by showing how to import the screener from the Stock Rover library as well as how to perform research on the screener’s results using the Table, Chart, and Insight layouts. We’ll finish with a demonstration of “Scoring” where we use the Relative Strength screener to determine the relative strength of a portfolio’s holdings.

Importing the Relative Strength Screener

Stock Rover’s Relative Strength screener is among the 150+ screeners available for import from the Investor Library. The Investor Library is accessible from the Start Menu ➡ Library.

Once in the Library, selecting the Screeners radio button will display a list of all the screeners available for import. Previously imported screeners will show in grey font. To locate our screener we can either scroll through the Screeners pane or narrow down the screener list by entering “relative” in the search box, as we’ve done below.

Once the screener has been selected the bottom pane displays the screener’s filtering criteria. We can see that our Relative Strength screener’s filtering criteria are as follows:

• 5-Day Return vs S&P 500 > 1%
• 1-Month Return vs S&P 500 > 2%
• 3-Month Return vs S&P 500 > 5%
• 6-Month Return vs S&P 500 > 10%
• 1-Year Return vs S&P 500 > 12%
• 3-Year Return vs S&P 500 > 25%
• 5-Year Return vs S&P 500 > 40%

Clicking the “Import” button then loads the screener into Stock Rover.

Running the Screener

Once the Screener has been imported, we’ll then want to run the Screener by first selecting Screeners, which is located under My Collections in the Start menu. Then from there, selecting the desired screener from the Navigation pane.

1. Start Menu ➡ Screeners – Select Screeners from the Start Menu
2. Navigation – Click on the Table icon
3. Select the Relative Strength screener
4. Views – Load the Screener Filters view from the Screener folder

Stock Rover will then display the passing tickers using the selected View in the Table, which in the case below is the ‘Screener Filters’ View.

The ‘Screener Filters’ view dynamically changes which columns it displays in the Table based on the screener selected. Below we see each of the Relative Strength’s filter criteria shown as a separate column.

Analyzing Screener Results

We can now conduct a comparative analysis of the tickers using the Table. Then we can display key fundamentals and key technical indicators via the Chart. And finally we can conduct specific ticker research with the Insight Panel.

The Table

The Table provides a flexible spreadsheet-like paradigm for viewing tickers and their associated data, enabling you to easily perform a comparative analysis.

We can choose to display only the Table by selecting the Table icon in the Navigation pane.

When the Relative Strength screener is selected in the Navigation pane, the Table will load with the tickers that currently meet the screener’s filtering criteria using the currently selected View.

Below, we are looking at the screener results through the Screener Filters view, which we selected from the Screener folder. The Table’s header shows that 126 stocks pass the screener’s filtering criteria.

Each of the 126 rows in the Table represents a ticker that met our filtering criteria, and each column represents a metric we would like to display. In our example, using the ‘Screener Filters’ view we see the screener’s filter criteria as separate columns:

• 5-Day Return vs S&P 500
• 1-Month Return vs S&P 500
• 3-Month Return vs S&P 500
• 6-Month Return vs S&P 500
• 1-Year Return vs S&P 500
• 3-Year Return vs S&P 500
• 5-Year Return vs S&P 500

Right-clicking on a column header allows us to alter the Table display. For example, we can tailor our display with sorting, filtering, grouping, and more.

We’re going to filter the Table to show only tickers with a 6-Month Return vs S&P 500 with a value between 75% and 125%.

Below we see the tickers that met our 6-Month Return vs S&P 500 column’s filtering criteria.

We can also add a ticker or multiple tickers to the Table for even more comparison, this is accomplished via the Quotes List feature. The Quotes List can be quickly populated by typing the desired tickers and/or company names into the search box next to the Stock Rover logo.

As we want to see how NVIDIA compares against our filtered tickers, we’ve entered the symbol NVDA in the search box and added NVIDIA to the Table. Note the tickers on the Quotes List are differentiated in the Table with bolded symbols as we can see with the NVDA symbol for NVIDIA

The Chart

The Chart is where we chart prices. We can also chart over 100 fundamental metrics and we can chart key technical indicators. We can also baseline stocks or use ratio charts for easy relative performance comparison.

We access the charting facility either by:

1. Selecting the Chart icon in the Navigation pane to display the chart only.
2. Selecting the All icon in the Navigation pane for All mode, which we’ve done below.

   All mode shows the Chart along with the Table and the Insight Panel. We can then see comparative information for the selected ticker, as well as the Chart, and detailed Insights all at once.

Here we are charting one of the tickers that passed our Relative Strength Screener, Wingstop (WING). We’ve also added the S&P 500 as a benchmark via the “Compare to” menu and we’ve also set it as a baseline by clicking on the red S&P 500 label in the legend.

We can also add Technicals to the chart by clicking on the Technicals pull-down menu and then selecting one or more boxes in the drop-down menu.

Let’s display the chart only. We’ll chart the Relative Strength Index for good measure. We’ll stick with the default period of 14 days.

The Price chart is displaying Wingstop outperforming the S&P 500, while the RSI chart under it is showing Wingstop in the 45 to 65 range. In a down market, the RSI tends to stay between 10 to 60, with the 50-60 zone acting as resistance.

The Insight Panel

The Insight Panel is populated with a wealth of analytics or “Insights” that are specific to the selected ticker.

We access the the Insight Panel either by:

1. Selecting the Insight icon in the Navigation pane to display the Insight Panel only, which we’ve done below.
2. Selecting the All icon in the Navigation pane for All mode.

   All mode shows the Insight Panel along with the Table and the Chart. We can then see comparative information for the selected ticker, as well as the Chart, and detailed Insights all at once.

The Summary tab below is showing price performance, Fair Value, and Margin of Safety. We also see Stock Rover’s proprietary stock scoring system, and much more.

As we are focused on Relative Strength, we’ll highlight the analytics related to “Return vs. Benchmarks”. Here we see the return performance of our selected ticker Wingstop, its industry, and the S&P 500. In addition, the 1-Year Beta is displayed.

Note also that the Technicals section shows a number of metrics, among them the Relative Strength Index.

Scoring with the Screener

Up to this point our focus has been primarily on how to run the Relative Strength screener and perform research and analytics on the passing tickers. However, screeners can also be used to evaluate portfolios and watchlists via “Scoring”.

To “Score” a portfolio or watchlist means we can see how the stocks in a portfolio or watchlist perform against the full set of a screener’s filters.

For example, we can use our Relative Strength screener to see which of our portfolio holdings consistently outperform the S&P500 and to what degree.

We’ll start by selecting Start Menu ➡ Screeners.

In the Navigation pane, we’ll then select the desired screener, in our example the Relative Strength screener.

Lastly, we’ll click right-click on the screener and select Score Portfolio in the pulldown (highlighted below) and select the desired portfolio we would like to score.

In our example, we’ve selected a portfolio called BT – Top Stocks 2024.

When “Scoring” is initiated Stock Rover will load the Table with the Screener Scores view which shows how the selection of tickers perform against the set of filters from a screener.

The “Score” column is calculated based on how many of the screener’s filtering criteria a ticker passed and failed.

As our Relative Strength screener has 7 filtering criteria, the scoring for each ticker in the portfolio will range from 100%, 7/7 meaning the ticker passed all the filter criteria to 0%, 0/7 meaning the ticker did not pass any of the filter criteria.

In the example below, when we mouse over PHM (PulteGroup) we see the ticker scored 71%, 5/7, so it meets 5 of the 7 criteria.

The tooltip shows how the 71%, 5/7 score was derived, showing the filtering criteria, PulteGroup’ current Value, and whether it passed or failed.

Once the Portfolio is scored, we can switch to different views and the “Scores” column will automatically follow. Below we selected the Growth view.

Summary

Stock Rover’s Relative Strength screener, which is available in the Stock Rover Investor’s Library, finds stocks with strong relative strength defined as consistent outperformance vs. the S&P 500 in all periods, ranging from the short term (5 days) to the long term (5 years).

The concepts outlined in this blog post are applicable to all screeners, whether it is a pre-built screener like our Relative Strength screener or one that you have edited or created from scratch.

When you’re ready to perform a comparative analysis, chart, or do a deep dive into a ticker, you’ll want to utilize the capabilities of the Table, Chart, and the Insight panel as we illustrated in the previous sections of this blog post.

Screeners can also be leveraged in additional ways beyond filtering for tickers that pass the screener. One of the key capabilities is “Scoring”, where you can see how stocks in your portfolio or watchlist perform against the full set of filters from your screener, as we illustrated in the prior section of this blog post.

We hope you’ve found this blog post helpful. Please let us know if you have further questions by emailing us at support@stockrover.com.