Trendlyne’s DVM (Durability, Valuation, Momentum) scores are one of the key ways users can filter for weak versus strong stocks on the platform, and it’s no surprise that they are built into the queries governing multiple premium screeners. DVM Screeners show strong historical returns on their backtests, and in this section we look into the various different DVM screeners you can choose from.
Top DVM Performers for All Stocks
A screener which most subscribers are familiar with, is the Top DVM Performers for All Stocks screener which sets high thresholds on the DVM scores, making it a mix of both a fundamental and technical screener.
Due to the high DVM score thresholds built into the query, stocks enter and exit the strategy on an ongoing basis and thus we recommend a weekly alert (click here to learn how to setup a strategy alert) to go with it. The screener works on all stocks within the BSE and NSE universe and thus provides some interesting picks which you usually wouldn’t see within your NIFTY and SENSEX indices.
A quick look at the backtest of the screener run for the period of January 2017 to June 2018 shows us that this strategy shows a cumulative return of 111.9% against the benchmark 23.48% NIFTY500 return.
If you’re a slightly more risk averse investor and like the usage of DVM scores but would like to focus on only Midcap and Largecap stocks, you can look into the Higher DVM Stocks Among Midcaps and Largecaps strategy.
Higher DVM Stocks Among Midcaps and Largecaps
Another screener which filters stock entry and exit using DVM scores, this strategy focuses on stocks found within the Midcap and Largecap market. This long term strategy has seen the best results in backtests when the portfolio is updated at a monthly frequency.
The screener limits its picks to Midcap and Largecap stocks by only considering stocks with a market capitalisation greater than Rs 60 crore. Loosening the thresholds on the DVM scores as well, this screener is preferred by investors who are willing to take a small risk but are looking to make long term investments on their portfolio.
A look at the backtests running over the period of 2.25 years shows that the strategy outperforms the NIFTY500 benchmark and has a positive win/loss ratio. The average stock count per month is very high, so we recommend this strategy to investors with large investing capital.
In case you are looking for a risk averse strategy with a lower number of stock picks per month, you can look into the Lower Risk: High DVM Stocks in Large Caps strategy.
Lower Risk: High DVM Stocks in Large Caps
A DVM screener at heart, this screener limits its picks to large cap stocks and thus is well-suited for the classic Indian investor who prefers long term investments. The strategy limits the stock picks using the thresholds on the DVM score and additionally adding conditions around ROE as well.
Looking at the backtest run on this strategy for a period of 5 years on a monthly frequency, we see that the total stock entries is significantly lower than the previous two strategies. Maintaining a positive win/loss ratio, this stock shows an average stock count of 2 stocks per month and shows a boast-worthy cumulative return of 583% when compared to the NIFTY500 benchmark return of 85%.
While the strategy runs best on a monthly frequency per our backtest, we recommend a weekly alert to ensure users don’t miss out on any surprise entries. This screener tends to empty up very fast when facing a bearish market.