Fave Five (5/12/2017)

Fave Five (5/12/2017)

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 9.1%.

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.

The Fave Five This Week

  • Air Lease (AL)
  • Akamai Technologies (AKAM)
  • FleetCor (FLT)
  • Skechers (SKX)
  • Tractor Supply (TSCO)

The Long and Short of This Week’s Fave Five

The Long & Short. (May 12, 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 +2.0% since inception. 46.9% of selections have outperformed the Wilshire 5000 since original selection.

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

January Effect in July?

This Week at MANIFEST (7/15/2016)

“Self-taught, are you?” Julian Castle asked Newt.
“Isn’t everybody?” Newt inquired.
“Very good answer.” ― Kurt Vonnegut, Cat’s Cradle

Winter is Coming.

Huh? “We’re melting over here and you want to talk about winter?”

Well, yes.

This week’s update batch is pretty “dormant.” We’ve been doing this for a long time and don’t remember the last time we had so few changes and/or materially stronger/weaker triggers. There’s only a couple in this week’s batch.

And yes, it’s the lazy hazy days of summer when Wall Street packs it in early on Fridays, heads for the Hamptons, and the trading volumes wane. So we pass the ice cream and our thoughts turn to January.

January?

The January Effect is a result of tax-loss selling which causes investors to sell their losing positions at the end of December. The January Effect is predicated on the idea that these stocks, which have been sold off to realize the tax losses, will be at a discount to their market value.

And the effect is most prominently manifested among the smaller, faster-growing companies.

This is a best practice that we’ve counseled in the past. Start earlier. Don’t wait. Sell earlier (because the institutions are probably doing this) and build your shopping lists well. Hunt down the opportunities during the fourth quarter and use your best judgment about assuming ownership as the year winds down … or early in January.

In that spirit, Manifest Investing will be working to add more small companies. Every week we see a persistent attrition and a loss of companies in the Value Line universe of 6000+ companies as M&A continues and fewer new companies take shape. We’ll be gearing up for our Best Small Company list to be published around Halloween and will be adding companies in earnest between now and October 1. Monitor the coverage list here in the weekly updates for opportunity and Ken Kavula has suggested that he will chime in on discoveries of promising faster growers as they come into focus.

We’re also going to mine the list of holdings at Renaissance Technologies (RenTec) using a variety of resource including www.insidermonkey.com. Why monitor the exploits of Jim Simons and his team??? (1) Check out this TED Talk: The Mathematician Who Cracked The Wall Street Code and (2) this excerpt of the hedge fund’s track record …

MANIFEST 40 Updates

  • 8. General Electric (GE)
  • 24. Danaher (DHI)

Round Table Stocks: ABB (ABB), MSC Industrial (MSM), Stifel Financial (SF)

Results, Remarks & References

Companies of Interest: Value Line (7/15/2016)

The average Value Line low total return forecast for the companies in this week’s update batch is 4.9% vs. 6.0% for the Value Line 1700 ($VLE).

Materially Stronger: AAON (AAON)

Materially Weaker: Stonemor (STON)

Discontinued: Constant Contact (CTCT)

Coverage Initiated/Restored: LGI Homes (LGIH), United-Guardian (UG), Nature’s Sunshine (NATR), WCI Communities (WCIC), Clearwater Paper (CLW), Huttig Building (HBP), Mastech (MHH), Citizen’s Holding (CIZN), United Bankshares (UBOH), Citizen’s Financial (CFG), Liberty Interactive (QVCA)

Market Barometers

Value Line Low Total Return (VLLTR) Forecast. The long-term low total return forecast for the 1700 companies featured in the Value Line Investment Survey is 6.0%, down from 6.1% last week. For context, this indicator has ranged from low single digits (when stocks are generally overvalued) to approximately 20% when stocks are in the teeth of bear markets like 2008-2009.

Stocks to Study (7/15/2016)

  • Akamai Technologies (AKAM) — Highest MANIFEST Rank
  • Investment Technology (ITG) — Highest Low Return Forecast (VL)
  • Stifel Financial (SF) — Lowest P/FV (Morningstar)
  • Morgan Stanley (MS) —Lowest P/FV (S&P)
  • LSB Industries (LXU) — Best 1-Yr Outlook (ACE)
  • Charles Schwab (SCHW) — Best 1-Yr Outlook (S&P)
  • Stifel Financial (SF) — Best 1-Yr Outlook (GS)

The Long & Short of This Week’s Update Batch

The Long & Short. (July 15, 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” Outlook: 1-year total return forecast based on most recent price target issued by Goldman Sachs.

Discovery Club

From the article, “How To Beat The Market By 20 Percentage Points”, the author suggested:

“Dump your hedge funds and imitate their small-cap stock picks.”

Small cap is not necessarily small (faster-growing) companies but in general, we like the idea of a nice blend. So yes, we’re interested in hunting down some actionable ideas among the most successful investors on our radar screen — seeking companies that aren’t on too many radar screens, yet.

The discovery of smaller, promising and faster-growing companies has always been one of our favorite (and rewarding) activities. In that spirit, we’re expanding our efforts in this realm. This week, we redouble our efforts to discover some smaller, less discovered companies and add them to our coverage. The EXTENDED EDITION of the Value Line Investment Survey will be the first resource scanned and we’ll also take a look at some new positions or significant accumulations among our Best Small Company Funds starting with Brown Small Company.

But it doesn’t end with only the smaller companies, we’ll also be vigilant for opportunities flagged by reviewing the quarterly filings of idea generation resources like the Renaissance Technologies hedge fund.

Coverage Initiated/Restored: LGI Homes (LGIH), United-Guardian (UG), Nature’s Sunshine (NATR), WCI Communities (WCIC), Clearwater Paper (CLW), Huttig Building (HBP), Mastech (MHH), Citizen’s Holding (CIZN), United Bankshares (UBOH), Citizen’s Financial (CFG)

https://www.manifestinvesting.com/dashboards/public/discovery-club-20160715

Fave Five (1/29/2016)

Fave Five (1/29/2016)

This week’s Fave Five is a tribute to the letter “A”. Apple, Aunt Annie’s Alligator, A, A, A. (Can you tell we have a 15-month-old grandson?)

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. This week’s Top One Percenters are Akamai Tech (AKAM), Apple (AAPL), Astronics (ATRO), Alliance Data Systems (ADS), and PRA Group (PRAA).

Context: The median 1-year total return forecast (via ACE) for the Value Line 1700 is 26.4%. The median 5-year return forecast (MIPAR) is 9.5% (annualized).

The Long and Short of This Week’s Fave Five

Weekend Warriors

The relative return for the Weekend Warrior tracking portfolio is +2.2% since inception. 57.6% of selections have outperformed the Wilshire 5000 since original selection.

Here are some links to fairly recent monthly stock features, Round Table discussions and/or analysis updates for companies in the tracking portfolio:

  • Apple (AAPL)
  • Forward Air (FWRD)
  • Stericycle (SRCL) Feb-2014 Round Table nomination by Nick Stratigos (starts at 18:33 of session)

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

Fave Five (1/15/2016)

Fave Five

Stock prices continue to drop faster than the one-year price targets — resulting in a slightly higher overall target for the Value Line 1700 for the next year.

But it’s a work in progress as the reductions continue to suggest eroding expectations. To provide some graphic clarity, we just checked the 1-year outlook with the 100 highest 1-year total return projections among the Value Line 1700 — and updated them. Approximately 20 were unchanged. ONE increased. (ESV) So that means 79% of those companies updated (many of them updated very, very recently) declined.

From a long-term perspective, this likely matters little. But it does suggest that analyst consensus expectations for the next year are continuing to erode … and that will not be helpful when it comes to short-term sentiment.

We’ll be watching the 4Q2015 earnings results as they unfold — and hoping for signs of strength.

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. This week’s Top One Percenters are Aaron’s (AAN), Akamai Technologies (AKAM), Synaptics (SYNA), Under Armour (UA) and Apple (AAPL).

Context: The median 1-year total return forecast (via ACE) for the Value Line 1700 is 26.8%. The median 5-year return forecast (MIPAR) is 9.5% (annualized).

The Long and Short of This Week’s Fave Five

Weekend Warriors

The relative return for the Weekend Warrior tracking portfolio is +0.9% since inception. 53.3% of selections have outperformed the Wilshire 5000 since original selection.

Here are some links to fairly recent monthly stock features, Round Table discussions and/or analysis updates for companies in the tracking portfolio:

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

Fave Five (12/11/2015)

Fave Five

Here are five stocks that could be studied going into the weekend. They essentially represent 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. This week’s Top One Percenters are Five Below (FIVE), Akamai Technologies (AKAM), Jazz Pharmaceuticals (JAZZ), Bank of Nova Scotia (BNS-TO) and Cognizant Technology (CTSH).

Context: The median 1-year total return forecast (via ACE) is 18.2%. The median 5-year return forecast (MIPAR) is 7.9% (annualized).

  • Five Below (FIVE) is a retailer that offers a broad range of merchandise targeted at the teen and pre-teen customer. All products are priced at $5 or below. Its products are in the following category worlds: Style, Room, Sports, Media, Crafts, Party, Candy, and Now. And here we pause to catch our breath because many investors are loathe to consider fad-sensitive apparel-related stocks. (1) We’ll only retain in the tracking portfolio for as long as it makes sense to do so. Consider it a prenuptial promise. (2) If you need a reminder about why this might make sense, see: And The Children Shall Lead Us… — note the returns to shareholders from some of these retail companies that we often avoid. (3) Five Below was featured prominently among our 50 Best Small Companies for 2016 holding down the #38 position.
  • Akamai Technologies (AKAM) provides cloud services for delivering, optimizing and securing online content and business applications. It provides its services to improve the delivery of content and applications over the Internet.
  • Cognizant Technology (CTSH) is an old friend to most of us by now. The company is a provider of information technology, consulting and business process outsourcing services. Its core competencies include Business, Process, Operations and IT Consulting, Application Development and Systems Integration, Enterprise… CTSH is the second most widely-followed company by our subscribers (AAPL is still #1) and was added to the MANIFEST 40 on 12/15/2008. (CTSH has beaten the market by +22.9% — annualized — since then.)

Weekend Warriors

The relative return for the Weekend Warrior tracking portfolio is +2.5% since inception.

Here are some links to fairly recent monthly stock features, Round Table discussions and/or analysis updates for companies in the tracking portfolio:

  • Apple (AAPL)
  • Stericycle (SRCL) Feb-2014 Round Table nomination by Nick Stratigos (starts at 18:33 of session)

Transactions

Skyworks Solutions (SWKS) was removed, or “sold” from the tracking portfolio after beating the market by 10 percentage points over the last few weeks. The SWKS PAR had dropped below our Sweet Spot.

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

Create an account and launch a FREE, fully functional 30-day test drive at http://www.manifestinvesting.com today.  Explore features like the Stock Search, Dashboards and Sandboxes … and our weekly features that highlight threats and opportunities for stock watchers and shareholders. The weekly features present a number of actionable stock study ideas. We’d be happy to give you or a friend a FREE test drive. Let us know via manifest@manifestinvesting.com (All we need is name, email address and zip code to establish an account.) Discover Manifest Investing today for only $79/year.  Create your account today.  

Value Line Low Total Return Screen (4/19/2013)

Companies of Interest

In keeping with last week’s Phoenix theme, many companies were bolstered in this release of updated company reports … leading to one of the stronger “Materially Stronger” collections we’ve seen in quite some time. (The definition of materially stronger is that the long-term low price forecast issued by Value Line has ‘step changed’ 20-25% over the last three months.)

General Electric (GE) is #18 in the MANIFEST 40 and has steadily been making portfolio and business/capital structural changes while continuing to position the company in high opportunity potential areas for future. Pentair (PNR) is making some of the same types of strategic moves recently. Checkpoint Software (CHKP) has some of the strongest fundamental and technical characteristics in this update field — and sports a fusion ranking of 99.

Materially Stronger: General Electric (GE), Pentair (PNR), Hillenbrand (HI), GATX (GMT), Roper Industries (ROP), Whirlpool (WHR), Gencorp (GY), Lindsay Corp (LNN), Tecumseh Products (TECUA), Morgan Stanley (MS)

Materially Weaker: E*Trade (ETFC)

Market Barometers

The median Value Line low total return forecast is 6.8%, compared to 6.7% last week.  (The long term average for this forecast is 8.5%)