B. Frequency Distribution: 5-year average annual return of 3000 US stocks
1. Stocks in Selected areas of the SOM for highest 1-month forecast return %
2. Darkened nodes marked by squares are the selected areas
3. Market/Book is low
4. Valuation is low too 
5. However volatility is on the high side
March 2009 was when the market was at its lowest, and of course since then it has rebounded to a remarkable extent. But if we go by the 5 year average annual return % of of 3000 U.S. stocks, the picture is not so rosy. As at now, many stocks still post a negative return [see top image]. In the frequency distribution above, the area associated with the number of stocks with returns less than 3.4 % average 5 year return is much greater than the area after that. In fact the distribution has a heavier, fatter tail on the negative side of the X-axis. Since the immediate outlook for the market is so murky, I focus on the short term. Using ValuEngine's 1-month forecast return % model, I screened for all US stocks with market cap greater then $100000 and and Average daily volume greater than 100000. The screen generated a list of 3000 stocks. These stocks are then placed on Viscovery's SOM, and using the mouse, the areas of highest 1-month forecast return were selected. The stocks in the darkened selected areas [marked by squares] are in image 1. Their location on the SOM remains the same when we look at them from the perspective of the other model variables. They score high in terms of having low M/B ratio and low valuation. But are more volatile. [see the other maps]. Low P/E too, see top image.But the most information can be gleaned from image 1 showing the list of stocks. Take a look at the sectors that these stocks belong to. Are there any Tech , Healthcare or Finance stocks? [well there are two Tech stocks]. I am intrigued by the over-representation of the number of Transportation, Energy and Public Utilities stocks, considering that they form a smaller % of the US stock population. Take note too, of the smaller market cap, reasonable valuation and Beta. When public utilities and transportation stocks sport a higher than normal Beta, it means something.
