Fave Five (12/8/2017)

Fave Five (12/8/2017)

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 median 1-year ACE total return forecast is 6.1%.

This week we return to the triple play screening method for our five favorites. The triple play possibility occurs when you find a stock that is very depressed in price and also appears to be on the verge of substantially boosting its profit margins. The triple play effect is possible in that:

(1) The depressed price of the stock can return to normal levels;

(2) increased profit margins can produce increased EPS and a higher price;

(3) may also cause higher P/E ratios, or P/E expansion.

Chugging Through 6000 Stocks in the Value Line “Universe”

Our playing field this week was limited to the stocks that qualified for our December Sweet 16 feature — discovered by applying the Triple Play criteria to the ~6000 stocks in the Value Line Investment Analyzer.

The Long and Short of This Week’s Fave Five

Long & Short Term Perspectives. (December 8, 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. 52-Week Position: Position on scale between 52-week low price and 52-week target price. 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.

Fave Five Legacy (Tracking Portfolio)

The relative/excess return for the Fave Five tracking portfolio is +5.7% since inception.

The absolute annualized rate of return is 22.6%.

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

Fave Five: Triple Play (11/17/2017)

Fave Five (11/17/2017)

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 median 1-year ACE total return forecast is 7.2%.

This week we return to the triple play screening method for our five favorites. The triple play possibility occurs when you find a stock that is very depressed in price and also appears to be on the verge of substantially boosting its profit margins. The triple play effect is possible in that:

(1) The depressed price of the stock can return to normal levels;

(2) increased profit margins can produce increased EPS and a higher price;

(3) may also cause higher P/E ratios, or P/E expansion.

Schlossing About

We continue to leave the 52-week “position”, a factor that combines with 1-year total return for the short term outlook. Walter Schloss loved to find vetted high-quality companies with solid expectations that were trading near the low end of a 52-week range.

This week’s short list has all the usual attributes over the long term, the next year (or short term) and also is expected to grow at double-digit rates, precisely the type of treat that we seek to discover going into the holiday season this year.

The Long and Short of This Week’s Fave Five

Long & Short Term Perspectives. (November 17, 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. 52-Week Position: Position on scale between 52-week low price and 52-week target price. 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.

Fave Five Legacy (Tracking Portfolio)

The relative/excess return for the Fave Five tracking portfolio is +5.3% since inception.

The absolute annualized rate of return is 20.6%.

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

Festivus Five (12/23/2016)

Festivus Five (12/23/2016)

December 23. Happy Festivus! Festivus is both a parody and a secular holiday celebrated on December 23 that serves as an alternative to participating in the pressures and commercialism of the Christmas season. Originally a family tradition of Seinfield scriptwriter Dan O’Keefe, Festivus entered popular culture after it was made the focus of the 1997 episode “The Strike”. The non-commercial holiday’s celebration, as it was shown on Seinfeld, occurs on December 23 and includes a Festivus dinner, an unadorned aluminum Festivus pole, practices such as the “Airing of Grievances” and “Feats of Strength”, and the labeling of easily explainable events as “Festivus miracles”.

This week’s stock study selections are “a Festivus for the rest of us!”

The primary driver for the screening criteria was the 1-year total return (via analyst consensus estimates) but the field was limited to companies with a Manifest Investing rank of 90 and above (based on long-term return forecast and quality ranking).

For context, the average 1-year ACE total return forecast is currently 8.0% for the approximately 2400 companies in our coverage.

So we’re looking for that 1-year miracle … as a case in point, the analyst consensus for Rocky Mountain Chocolate Factory (RMCF) has a 1-year total return forecast of 78.6% based on an expected price of $18 and a 4.7% yield. The problem is that the ACE committee of analysts is N/A.

The Fave Five This Week: Festivus Special

The Long and Short of This Week’s Fave Five (Festivus Special Edition)

Festivus SPECIAL: The Long & Short. (December 23, 2016) 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 +3.7% since inception. 46.3% of selections have outperformed the Wilshire 5000 since original selection.

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

Fave Five (12/16/2016)

This weekly feature is now into its second year and we now have a handful of positions in the tracking portfolio with a holding period greater than a year.  The two-pronged screening method seems to have promise and it also serves as a “proving ground” for our exploration of excess/relative return-based selling guidelines.

Fave Five (12/16/2016)

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 7.9%.

This week we’re renaming the tracking portfolio and will begin referring to it as the Fave Five Legacy.

It will reside at: https://www.manifestinvesting.com/dashboards/public/fave-five

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 markr@manifestinvesting.com.

The Fave Five This Week

  • Allergan (AGN)
  • Roche (RHHBY)
  • Rocky Mountain Chocolate (RMCF)
  • Silicon Motion Technology (SIMO)
  • Teva Pharma (TEVA)

The Long and Short of This Week’s Fave Five

The Long & Short. (December 16, 2016) 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 +2.7% since inception. 50.6% of selections have outperformed the Wilshire 5000 since original selection.

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

Fave Five: Escape Velocity

Fave Five (12/9/2016)

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 8.1%.

Every year we run a stock selection challenge starting on Groundhog Day (February 2) and running for the next twelve months. Individual investors and groups like investment clubs are welcome to participate by choosing 5-20 stocks.

We’ve now got nine annual contests under our belt. We crown an individual and group champion every year.

Escape Velocity

In three of the last four years, the Broad Assets Investment Club of St. Louis has toppled dozens of competing groups — taking home multiple Groundhog stock selection championships.

I’ll let that sink in.

Three of the past four years. Their excess/relative return (annualized) since inception is +28.7%.

Let that sink in, too.

We want some of whatever they’re having. Seriously, we checked the water … asked what they had for breakfast, etc. in an effort to come to grips with the primary driver behind their stunning success and track record. We discovered one potential influence. It seems like Broad Assets latches on to companies that have huge incremental improvements in earnings forecasts for next year versus this year. We detailed our findings in our cover story, Victory By Escape Velocity?

This week’s Fave Five is based on companies with solid long-term outlooks that also have superior earnings forecasts for 2017 versus estimates for 2016. The bracketed column displays the top five year-over-year forecasts, according to analyst consensus estimates. [Source: ACE and finance.yahoo.com]

The median year-over-year (2017/2016) differential for the ~2400 companies we cover is currently 11.8%.

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 markr@manifestinvesting.com.

The Fave Five This Week

  • Allergan (AGN)
  • Baidu (BIDU)
  • Celgene (CELG)
  • Five Below (FIVE)
  • Universal Display (OLED)

The Long and Short of This Week’s Fave Five

The Long & Short. (December 9, 2016) 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.

Weekend Warriors

The relative/excess return for the Weekend Warrior tracking portfolio is +5.8% since inception. 51.9% of selections have outperformed the Wilshire 5000 since original selection.

Tracking Dashboard: https://www.manifestinvesting.com/dashboards/public/weekend-warriors

Weekend Warrior Tracking Portfolio: Selling Discipline

There are two primary selling conditions for the Weekend Warrior tracking portfolio.

  • For the first year after selection, if the excess/relative return (vs. the Wilshire 5000) becomes less than -20%, the position is closed.
  • A position is also closed (usually with a victory lap) when the return forecast (PAR) is less than the median return forecast (MIPAR).

This week, Stifel Financial (SF) and Raymond James (RJF) have both been on a surge, gaining 65% since selection. With return forecasts of 2-4% when the median return forecast is now 5% — both positions were closed. [High Five]

Fave Five (12/2/2016)

Fave Five (12/2/2016)

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 8.1%.

We’re back after a Turkey hiatus and proceeding with the second year of this weekly feature and resultant tracking portfolio. This week’s stocks represent some leaders with a solid long term outlook, a couple that have clearly found a speed bump … but all of them are generally regarded as “over sold” and many of them have been appearing on screening results.

The Fave Five This Week

  • Allergan (AGN)
  • Cerner (CERN)
  • Steris (STE)
  • Synaptics (SYNA)
  • Teva Pharma (TEVA)

The Long and Short of This Week’s Fave Five

The Long & Short. (December 2, 2016) 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.

Weekend Warriors

The relative/excess return for the Weekend Warrior tracking portfolio is +4.5% since inception. 51.3% of selections have outperformed the Wilshire 5000 since original selection.

Tracking Dashboard: https://www.manifestinvesting.com/dashboards/public/weekend-warriors

Morningstar Fair Value Screen

Screening Results (June 2016)

Best Prices Vs. Fair Value: Morningstar

by Mark Robertson

Is the market cheap or expensive? We don’t really pay much attention to this, instead rendering that same opinion on a stock-by-stock basis as we hunt for quality companies at bargain prices. This month, we display a baker’s dozen of good/excellent quality companies with the lowest price-to-fair value ratios in the Morningstar coverage universe.

Good or Excellent — At A Discount

The only exception is Fiat Chrysler (FCAU) because this one is very close to home. The low quality may be off set by a continuing strong vehicle market where the sale of Jeeps and minivans continues to persist. The other potential is a buyout by Volkswagen or some other multi-national entrant and Morningstar’s red tag sale (46%) on Chrysler is echoed by the likes of ACE, S&P and Goldman Sachs.

There are a number of retailers that have hammered into red tag status by stock shoppers over the last few months. Swatch (SWGAY) is relatively uncovered and worth a closer look for many of the same reasons. Recent selections Allergan (AGN), Gilead (GILD), Polaris (PII) and Skyworks (SWKS) continue to be worthy study. Take a Bayer (BAYRY) and call your broker in the morning.

Morningstar P/FV Study Candidates. (June 6, 2016) The companies displayed are ranked by Price/Fair Value (Ascending). Projected Annual Return (PAR): Consensus based return forecast based on 5-year time horizon. Quality Ranking: Percentile ranking of composite that includes financial strength, earnings stability and relative growth & profitability. Value Line Low Total Return (VLLTR) Forecast: Total Return based on low price forecast for 3-5 year time horizon. Morningstar Fair Value: Estimated price of stock, based on discounted cash flow, that would fully reflect all assumptions about enterprise value. Morning Stars: Based predominantly on return forecast, stocks are rated from 1-to-5 Stars (high returns). S&P P/V: Standard & Poor’s price-to-fair value. ACE: Analyst consensus estimates. GS: Goldman Sachs, 1-year price targets based on most recent research. Sources: Value Line Investment Survey, Morningstar, S&P Capital IQ, finance.yahoo.com, Manifest Investing