Using Finviz to mine small CAP stocks that are performing well

Finviz.com is one of the online tool you can use in data mining for possible investment opportunity. If you use the filter very well to your advantage, there is a big chance that you can always end up with very good results.

To use Finviz, it doesn't need to have a paid membership. You can sign up for free with finviz.com. Although if you want to get more advance data you can sign-up with their paid membership accounts. In my case, I just used the free ones. And this filter I am going to show today is about mining for small cap that can give you good return. After signing up with finviz. Go to finviz.com and click the "Screener" Menu. Click the tab named "All". This will show all the filter for Descriptive, Fundamentals and Technical. Set your filters based on our rule below, then set your viewing preference to "Snapshot". This will give you a quick overview of the company and the figures we are looking for.

We will try to follow fundamental rules that will guide us how we can find what we are looking for.
The following 1st 5 rules are based on the book of Ian Wyatt titled "The Small Cap Investor". 

The #6 Rule is based on the Turtle trading by Richard Dennis and William Echardt in the book 'The complete turtle trader" written by, Michael C. Covel p.109. The rule is looking for stocks that had reached new 55 day high. Since Finviz has only 50Day High. This is what we use as filter.

Rule #7 and #8 are based from Mark Minervini's book "Trade Like a Stock Market Wizard". Mark had been a very good player in the stock market and had made good amount of money in stocks using his VCP "Volatility Contraction Pattern" method out of the stocks that had gone up already and whose price is above the 200 Day Simple Moving Average (SMA) and whose 50 Day SMA is above the 200SMA.

Rule #9 and #10 are based on the liquidity of the Market. You want to make sure that when you buy there are a lot of volumes, at least 200K and above shares. And when you want to dispose it, there are also a of possible buyers who want to take it from you.

1. It should be in the Small Capitalisation group. Around $300milion to $2billion of capitalisation.
2. Earnings per share (EPS) growth for the last 5 years should be above 20%
3. EPS growth for the next five years is expected to be more than 20%
4. EPS for this year should also be more than 20%.
5. EPS for next year is expected also to be more than 20%
6. 50Day High/Low = New High.
7. 200 Day SMA = Price above 200SMA
8. 50 Day SMA = 50Day SMA is above 200Day SMA
9. Average Volume = Over 200K 
10. Current Volume = Over 200K

With these rules we can use for filtering we should be able to find the best small cap stock we need to invest with.

The filter yielded us the company ticker "NMIH". It is a mortgage Holding Company whose Earnings per share this year is posting 322.20% and projected EPS next year is 44.12%. EPS Q/Q (Quarter per quarter  is 90.50% and Sales Q/Q is 39.8%. Everything seemed to be green on this ticker.

Now we will go to bigcharts.com to help us check the P/E history of this company. With bigcharts.com you don't need to sign up in order to use the charting. I used the Advanced Chart because I can plot the Volume + Bollinger Bands, Simple Moving Averages and P/E Ratio. One of the rule of Mark Minervini is that the P/E ratio should be going higher. In fact he is advocating for at least a ratio of 30. In this example we have a growing P/E ratio but not yet 30. It is rising though. 

  

After that initial High Volume of more than 10Million P/E ratio had been slowly increasing from 11 to 15.