Perils of Bottom Fishing?

Fave Five (5/26/2017)

Our Fave Five essentially 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 average 1-year ACE total return forecast is 9.6%.

The Fave Five This Week

• Bank of the Internet (BOFI)
• FleetCor Technologies (FLT)
• Monro Muffler (MNRO)
• Orchids Paper Products (TIS)
• Stamps.com (STMP)

The Long and Short of This Week’s Fave Five

The Long & Short. (May 26, 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 +1.8% since inception. 45.3% of selections have outperformed the Wilshire 5000 since original selection.

Tracking Dashboard: https://www.manifestinvesting.com/dashboards/public/fave-five

We had several stocks sold, stopping out on relative return less than -20% for non-core stocks in the tracking portfolio:

• AmTrust Financial (AFSI)
• Chicago Bridge & Iron (CBI)
• Horizon Pharma (HZNP)
• Opko Health (OPK)