All the data is available to create a Tiny Titans screen in the Morningstar Premium stock screener. Morningstar Premium is fee based and is only available online.
Once you log into the screener, you get the first row of the screener grid and must use “Select Data to Screen on:” to select the Data unique to the Tiny Titans. A pop-up window is provided to identify the Conditions and Values once the Data field is selected.
The Tiny Titans strategy looks for market cap (inflation adjusted to 2004) between US $25 million and US $250 million. This requires two lines in the screen. The parameter Market Capitalization (mil $) is in $US millions so use 25 and 250 for the custom values.
Price / Sales Ratio – Current should be less than one by definition so use 1 as the custom value. The sample uses <= rather than <. Your choice how exact you want to be.
It is possible to substitute an sector relative Price / Sales Ratio in Morningstar in place of the absolute value. In the Value column, simply replace the custom value with the Sector P/S selection. An S&P 500 and a stock’s 5 year average P/S are also offered as alternatives.
Use the not = condition to eliminate the OTC stocks.
For liquidity, the average trading volume was set to a minimum of 100,000. Morningstar does not define how the average is calculated.
Finally, the Tiny Titans strategy looks for the 25 stocks with the best 52 week price appreciation. The relative strength of stocks to the S&P 500 was used to rank the results. A value other than -20 would be used to reduce the number of results from 101 to some number closer to 25.
Once the screen is complete, you click a button to view the results.
An alternate to changing the value until only 25 stocks pass is to sort the results in the view by relative strength and take the 25 strongest.
A final consideration is the use of Morningstar’s proprietary ratings / grades. For example, you may want to use the star rating and only accept stocks with 4 or 5 stars. Or you could rank the results by the star rating and select the top ranked 25.
Another approach is to plan on fewer than 25 stocks.
Morningstar does not currently offer the ability to back-test a strategy within their premium screener.
Titans Screeners > MorningStar
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