Stock Quotes in this Article: AIT, EZPW

The following commentary comes from an independent investor or market observer as part of TheStreet’s guest contributor program, which is separate from the company’s news coverage. The opinions expressed are those of the author and do not represent the views of TheStreet or its management.

NEW YORK (Scott's Investments) -- I update the following portfolio/screen on a monthly basis on Scott's Investments. Of May's list of 24 stocks, the 10 top-rated stocks returned an average of 0.11% versus -3.95% for SPY. The entire list of 24 stocks last month returned an average of -1.83%.

----------------------------------------------------------

More From Stockpickr

  • 5 Stocks With Big Insider Buying
  • 5 Breakout Trades for Profits This Week
  • 30 Stocks to Watch This Week
  • ----------------------------------------------------------

    The screen looks for the following:

    • earnings growers still reasonably priced as judged by the PEG ratio
    • low debt
    • a history of high return on equity and investment, and
    • price momentum as gauged by the percentage the stock is trading to its 250-day high.
    • The stocks are then ranked based on fundamental factors as compiled by stockscreen123.

    14 stocks qualified for this month's list. This tells us that limited individual stock momentum exists in the market and the fundamental factors on the list can still be found among the high momentum stocks. However, the number of qualifying stocks is less than last month's list and substantially less than April's 34 stocks, which is not surprising given that overall equity momentum has waned in May and June.

    Two stocks are intriguing on this month's list. EZCorp (EZPW), a short-term credit service and pawn shop operator, has been in a strong long-term uptrend and has repeatedly made this screen. It has very little debt, a PEG ratio of 0.83 and return on equity of over 20%, and it has projected annual earnings growth of 15% over the next five years. The weekly chart courtesy of Finviz is below. From a technical perspective, I would wait for a close above $33 before considering a long entry.

    Applied Industrial Technology's (AIT) momentum has slowed in recent weeks, but it still remains near the top of its range as indicated by the weekly chart below. AIT is an industrial equipment wholesaler. It has a yield of 2.22% and PEG of 0.87. It has no debt and has five-year earnings growth projected at 17% annually:

    Scott's Investments focuses on consolidating and tracking free online investment resources for the public with an emphasis on ETFs, portfolio/trading strategies and macroeconomics. Follow Scott's Investments on Twitter.