matter whether you're looking for the next tech rocket or
beaten-down value plays, just one of your holdings filing for
bankruptcy would ruin your day.
Thus, it’s best to stick with stocks unlikely to suffer that
call them “Bulletproof Stocks.”
Here's the formula that
we use to screen for Bulletproof stocks:
Bulletproof Stock Screening Formula
• Maximum debt/equity ratio (MRQ): 0.2
• Minimum quick ratio
• Operating cash flow (TTM): greater than zero
• Return on Equity (TTM): greater than zero
• Revenues (TTM): minimum $50 million
• Trading price: minimum $10
MRQ = most recent quarter, TTM =
trailing 12 months
here for more about the formula. Click
here to see a recent list of
Bulletproof stocks. Qualifying as bulletproof
only means that a stock isn’t a bankruptcy
candidate, not that you’ll make money owning it.
To solve that issue, we've developed a
formula for pinpointing the stocks on the Bulletproof list that have the
best appreciation potential. After extensive backtesting, we found that
limiting this new list, Best Bulletproof Stocks, to seven picks produced
the best returns. In fact, if held for six months, a portfolio
containing equal dollar amounts of each of the seven stocks should significantly outperform the S&P
500. Here are the numbers.
suggests you would have achieved these
returns had you generated
a new portfolio every week over the past 10 years and held each
portfolio for six months.
Returns vs. S&P
All Markets Ave
Up Markets Ave
Down Ave Markets
Sell/Rebalance 6 months
displayed above are based on backtesting that involved buying new seven
stock portfolios every week for 10 years, and holding each portfolio for
six months, then selling.
Although the average returns of the 497 completed weekly portfolios were
profitable, about 31% of them recorded losses, roughly equal to the
number of weeks that the S&P 500 also lost ground. Further, historical
returns do not necessarily
predict future performance, and your returns may not be
Without further ado,
here's the list. Buy equal dollar amounts of each stock, hold for six
months, then sell all and repeat.
Best Bulletproof Stocks