Fave Five (1/27/2017)
Our Fave Five generally represents a listing of stocks with favorable short term total return forecasts (1 year, according to Analyst Consensus Estimates, or ACE) combined with strong long-term return forecasts and good/excellent quality rankings. The median 1-year ACE total return forecast is 7.9%.
This week we spend a few moments with John Kimmel of Wichita, Kansas. John is currently the front runner in the individual category with a +67% return — as a co-conspirator with his Long-Term Investment Club colleagues — and in the institutional category for his Brookfield Digest newsletter.
This domination of the Groundhog field is unprecedented.
In his words: I think biotech should recover further into the year if President Trump and Congress are not too unfavorable. Maybe the worst is priced in. Haven’t bought Jazz Pharma (JAZZ) or Under Armour (UAA) but the numbers look good enough I want to get my clubs to study for possible purchase. My “bench” which I own are Air Lease (AL), Cognizant Technology (CTSH), FaceBook (FB), LKQ Corp. (LKQ), & Opko Health (OPK). [John’s club was one of the clubs that shared the “light” when it came to Bio-Reference Labs and decided to hold OPK after the transaction.] Another six are speculative, some of which have the possibility of maybe pulling off an FCX. One can hope.
As a reminder of what FCX has done over the last year:
Yes, Virginia, that’s a 250% gain. John and his colleagues selected different portfolios for all three categories in this year’s contest and every single selection has positive gains with the vast majority beating the market.
For more information on joining our 11th annual Groundhog Challenge, launching 2/2/2017, as either a group or an individual investor, drop a note to firstname.lastname@example.org.
The Fave Five This Week
- Biogen (BIIB)
- Celgene (CELG)
- Five Below (FIVE)
- Jazz Pharma (JAZZ)
- Under Armour (UAA)
The Long and Short of This Week’s Fave Five
The Long & Short. (January 27, 2017) Projected Annual Return (PAR): Long term return forecast based on fundamental analysis and five year time horizon. Quality Ranking: Percentile ranking of composite that includes financial strength, earnings stability and relative growth & profitability. VL Low Total Return (VLLTR): Low total return forecast based on 3-5 year price targets via Value Line Investment Survey. Morningstar P/FV: Ratio of current price to fundamentally-based fair value via www.morningstar.com S&P P/FV: Current price-to-fair value ratio via Standard & Poor’s. 1-Year ACE Outlook: Total return forecast based on analyst consensus estimates for 1-year target price combined with current yield. The data is ranked (descending order) based on this criterion. 1-Year S&P Outlook: 1-year total return forecast based on S&P 1-year price target. 1-Yr GS: 1-year total return forecast based on most recent price target issued by Goldman Sachs.
Fave Five Legacy (Tracking Portfolio)
The relative/excess return for the Fave Five tracking portfolio is +4.4% since inception. 48.9% of selections have outperformed the Wilshire 5000 since original selection.
Tracking Dashboard: https://www.manifestinvesting.com/dashboards/public/fave-five