Fuzzy Multi-criteria Optimization Method for Screening of Pharmacy Companies’ Stocks in Tehran Stock Exchange

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Abstract

In this study a new method for stock screening and ranking according to fuzzy multi-criteria optimization techniques is presented. In the proposed method two main criteria are used for selecting suitable stocks. The first criterion is obtained from companies financial ratios and shows the financial health of companies. The second one is the criterion of companies’ market success and is obtained using companies' stock prices in different periods. Through using these values and the proposed method which performs on the basis of contiguity of these two criteria, we practice stock screening. The proposed method has been applied to 29 pharmaceutical companies in Tehran Stock Exchange. It is suggested that the proposed method makes it possible to select the appropriate stocks, characterized by high conformity of financial performance with their market success. This method prevents the selection of firms whose success is based on items such as rumors and incorrect information. Finally it was determined that among 29 pharmaceutical companies, the following companies are placed in the screened collection: Kosar, Faravardehaye-tazrighi, Loghman, Amin, Roozdaroo and Abooreyhan. Among these firms Loghman Company was selected as the most reliable company for investment.

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Commercial Strategies
Volume 9, Issue 50
January 2012
Pages 227-244

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