After running the screener of just utilities against the S&P, you can see which one is the obvious winner. Investors then bought the company’s stock rather than the bond thanks to the favorable dividends offered by many utility companies. However, during the financial crisis investors saw interest rates at almost zero which allowed utility companies with large amounts of debt to relax a bit. Utility companies are known to carry large amounts of debt so investors traditionally would buy corporate bonds instead of their stock. While utilities may not be the sexiest-sounding investment idea, they have shown good returns in recent years. This sector is gifted with constant demand.

While I was looking at the results, I noticed that almost all of the Utility companies posted a positive return since 2004 with only 3 or 4 anomalies I thought to myself “why?”įor starters, this sector receives a hefty amount of government subsidies. However, it was done at a higher standard deviation, experiencing more volatility with the screener than the S&P. Immediately, 1290 stocks are returned by the screen.Īfter backtesting this screener, it did, in fact, beat the S&P by a minuscule. For this screener, I will screen for companies with insider ownership at 5% or below. Let’s take a look at low insider ownership and see if we can finally beat the S&P 500. To my surprise, after screening this it seems that this screener performed even worse than the previous one with more insider ownership. Now that we are working with 123 results rather than 29, we may see a better performance against the S&P since we are more diversified now. Just by glancing at these results there are a number of household names such as Papa John’s Pizza (PZZA), Oracle (ORCL), Columbia Sportswear (COLM), etc. Let’s tweak the screener and see how companies with a fourth of insider ownership performed over the same time frame. Also, from the backtest below you can see that these companies underperformed the S&P 500 in recent years by a significant amount.Īt this point, a company with large insider ownership has lost some investment appeal. Returning only 29 results, one can discern that owning the majority of your company isn’t common among publicly traded companies. Let’s take a look how companies with higher insider ownership have performed compared to companies with low insider ownership.įor this first screener, I screened for companies whose insiders hold a controlling share (>51%) of the company’s stock. The other side of that coin is that owners may not listen to the advice of people within the company, using their position as majority shareholder to push for things the company wouldn’t do otherwise. If the management owns a large portion of the company, then they are incentivized to perform well – benefiting not only themselves but the shareholders as well. High insider ownership is something commonly associated with value investors.

Srdx backtest