NEW YORK ( TheStreet) -- The mark of a good stock screen, in my view, is not only whether it produces solid results, but also its ability to identify investment candidates in all sorts of market environments.That is a very tall order. I've had plenty of success with the former. However, my value investing-based screens have had difficulty with the latter in this rising market environment. Every day, it seems, it becomes more difficult to identify value, but that comes with the territory. I've known value managers who simply won't buy in market environments where they can't find stocks that meet their criteria, and they will not compromise by lowering their standards. One year ago, I identified a list of potentially cheap small and midcap names with solid net profit margins and growing, sustainable dividends, based on the following criteria:
- Market capitalization between $100 million and $5 billion Net profit margin of at least 8% for the trailing 12 months and for the latest fiscal year Dividend yield greater than 1% At least four consecutive years of increasing dividends Payout ratio less than 50% Price earnings ratio of less than 20 No financials
Rounding out the very short list of qualifiers is consumer health care products company Female Health Company ( FHCO), a small, $260 million market cap company that trades for 16.5 times trailing earnings, and yields 3%. While small in size, Female Health boasts a staggering 43.4% trailing 12 month net profit margin. The value crowd, myself included, is having to turn over a significant number of rocks these days in order to find anything that looks interesting, as evidenced by the declining number of candidates revealed by this screen. At the time of publication the author had no position in any of the stocks mentioned. Follow @JonMHellerCFA This article was written by an independent contributor, separate from TheStreet's regular news coverage.