CTSH

Round Table: Standing Room Only?

expectingalpha Stocks , ,

Queue Dozing?

If this persists, we may have to go to assigned seating for Pavilion seats at next year’s Round Table Awards?

Some of these long-term investors have camped out to save their place in the queue.

“Dude, if you’re gonna go with Southwest Airlines cattle car seating programs, we’re going to have to resort to this. But no worries, we do this all the time at places like Duke or Michigan State University.”

Yes, it’s true that Southwest Airlines (LUV) is in the running for one of the most prestigious categories on Saturday morning.

“No. We’re not cold. It’s not like we’re doing this in Michigan … or New York … or Wisconsin. This is a cyber event, Silly! Besides, word on the street is that Ken Kavula has been red hot with his Round Table picks lately. We want to know how hot.”

True. But you’ve got the pajamas optional part right. Attendees are welcome to drop in with a cup of coffee and don their favorite casual attire. There is no truth to the rumor that Kathy Griffin or Joan Rivers will be doing fashion commentary tomorrow. I wouldn’t rule out a few pushups by Jack Palance, particularly if he’s nudged by Billy Crystal or Ellen Degeneres.

There’s still room and long-term investors are welcome and invited to join us. Yes, you may bring your sleeping bag.

Date: Saturday — March 1, 2014
Time: 11 AM ET (but the red carpet festivities will start at 10:30 AM ET)
Register: https://www.gotomeeting.com/register/475449410

Happy Valentine’s Day, MANIFEST Nation!

expectingalpha Stocks , , , ,

 

Rolling Over … Watching 2015 Roll In

Happy Valentine’s Day, MANIFEST Nation!

With Issue 13 of the Value Line Investment Survey landing this week, we’ll soon be getting our first look at some of those 2015 sales and earnings forecast — likely starting next week.

We’d like to be able to say that the carnage has abated, but we can’t. The stealthy reductions in expectations continue and the 2014 forecasts are considerably weaker to start the year than we generally see. Keep in mind that these forecasts have historically eroded from optimistic starting gate positions that steadily get smaller as the calendar pages turn. It’s a pretty unusual year where this is not the case.

We also note the population of Materially Weaker companies continues to exceed the Materially Stronger based on quarter-over-quarter changes in the Value Line long-term forecasts. We would not have been surprised to see this slow down a bit, but as displayed below, the number of weakening situations continues to outpace opportunity.

Here’s a look at the Net Profitability profile and trend for the Value Line industrials as 2013 locks in (actual results) and readies for the 2015 roll call. It’s not horrific, but it is one of the reasons I still say that people who spoke and respected recessionary pressures during 2013 were at least partially right. The current economic recovery, although steady, is still quite lackluster.

Companies of Interest

We’ll do a quick profile of KKR (KKR) based on the Value Line low total return forecast and solid overall condition of the company. We also note that Cognizant Technology (CTSH) and Infosys Tech (INFY) continue to portend better days ahead.

Western Union (WU) is favored at both Morningstar and S&P in this week’s batch and it has served Kim Butcher quite well as a long-time Round Table selection.

Materially Stronger: LinkedIn (LNKD)

Materially Weaker: EZCorp (EZPW), Mantech International (MANT), Federated Investors (FII), Amazon (AMZN), Fusion-io (FIO)

Morningstar Price-to-Fair Value Nudges

The average P/FV for the companies in this week’s update according to Morningstar is 108%.

Standard & Poor’s P/FV Nudges

The average P/FV for the companies in this week’s update according to S&P is 100%.

Market Barometers

The Value Line low total return forecast is 3.2%, up from 3.0% last week.

MANIFEST 40 (December 2013)

expectingalpha Stocks , , , ,

The Stocks You Follow: December 2013 Update. 8 1/4 years. We’ve continuously monitored the 40 most-widely followed stocks by our community of subscribers at Manifest Investing for that long. We think it’s more than a fair assumption that many of these are in your real money portfolios … and for that, we’re optimistic and grateful. This managed “tracking collection” of your collective favorites has outperformed the Wilshire 5000 by +3.1% (relative rate of return, percentage points). The aggregate absolute return has been 9.0% during a period when the annualized total return for the general stock market has been 5.9%. With 8.25 years in the can, the average holding period is 5.7 years.

Peak Performance

Our MANIFEST 40 is a celebration of collective excellence in stock selection, strategy and disciplined patience.

With an average holding period of 5.7 years, the annualized relative return of the current tracking portfolio is approximately +3% versus the Wilshire 5000, approaching our long-term objective. With above average growth (8.5%) and a return forecast of 8.9% (vs. 5.3% for the general market) we see continuing solid performance ahead …

“We have always believed that the collective
decisions made by our community of
like-minded, long-term investors
are worth huddling over …
a place where ideas are born.”

A little over eight years. We established and have been tracking your most widely-followed stocks for more than eight years. Many of the original “40” are still on the list. There have been relative few kings-of-the-hill, including Bed Bath & Beyond (BBBY), Stryker (SYK) and current pole position and community favorite, Apple (AAPL).

Bottom Line(s)

The annualized rate of return for this tracking portfolio is 9.0%. The Wilshire 5000 has gained approximately 6.0% (annualized) since inception … so the relative return (alpha) of these community favorites is a stellar +3.0%.

The relative return of the ACTIVE, current 40 positions, in the tracking portfolio is also +3.1% annualized.

21-of-38 active entries have outperformed the Wilshire 5000 since selection for an accuracy rating of 55.3% compared to 62.5% in September 2013. 62.5% is well above “average” for selecting “winners” by the overall universe of investors and traders.

MANIFEST 40 (December 27, 2013). These are the most widely-followed stocks by subscribers at Manifest Investing. Current leader Apple (AAPL) was added to the list back on September 24, 2009 and steadily climbed the ranks while generating a relative return of +21.3% (annualized) over the trailing three years despite the swoon of 2013. Figures in parentheses are the ranking back on September 30, 2013.

Chargers

Qualcomm (QCOM) has, once again, continued to move up the charts, going from #16 to #12 over the last three months. QCOM had the greatest percentage gain in dashboard appearances. Other companies making strong showings of interest include recent Solomon Select feature Cognizant Technology (CTSH) and Portfolio Recovery (PRAA).

The results of $100 positions investing in any of the Top 40 companies can be viewed at any time at:

http://www.manifestinvesting.com/dashboards/public/manifest-40

Strongest Performers

The three top performers in the MANIFEST 40 since inception — based on annualized relative return — are Portfolio Recovery (+40.3%), Cognizant Technology (33.7%) and Buffalo Wild Wings (30.6%). $100 invested in Cognizant Technology (CTSH) on 12/15/2008 is now worth $572

Newcomers

We pay considerable attention to the chargers and new additions to the list. Apple was a new addition back on 9/24/2009 and $100 invested then is now worth $564 (relative return = +21.3%).The two newcomers are actually returning former residents: Intuitive Surgical (ISRG) and Gilead Sciences (GILD).

Round Table (November 2013)

expectingalpha Stocks , ,

Join us Saturday morning (11/23 11 AM ET) for the November 2013 Round Table as we explore, discover and CELEBRATE the performance results of the tracking portfolio.

FREE webcast! Register at: http://www.manifestinvesting.com/events/136-round-table-november-23-2013

The mood is certain to be festive — grateful, even — as we celebrate a legacy of stock selection in/with a COMMUNITY of long-term investors who are no strangers to the land of alpha and positive relative returns. We’re not afraid to keep score and we’re always seeking lessons and best practices to make us all better.

The annualized relative return since inception is now at +3.1% with an overall outperformance accuracy of 57.9%.

Approximately 2% of 20113 funds achieved better performance over the trailing 3-years. [Source: Morningstar]

Ken Kavula, Hugh McManus, Mark Robertson and special guest damsel, Susan Maciolek will share our favorite Thanksgiving stock ideas.

Tune in to see if Hugh McManus can actually find a deep value stock that captures his attention … he’s “passed” a few times lately and believes that bargains are a little more challenging to find than usual even as Black Friday approaches.

Companies Likely To Be Studied/Presented:

  • Apple (AAPL)
  • Cognizant Technology (CTSH)
  • Panera Bread (PNRA)

References:

Round Table Tracking Dashboard

Red October: Forbes Best Small Companies for 2013

This Week at MANIFEST (11/15/2013)

expectingalpha Stocks , , , , ,

Movember? Going Grubby?

I’m not sure whether it’s a hunting season thing … or merely an excuse that many men use to take a break from shaving, but Movember is in full swing in many places. Beard Mania was celebrated BIG in Boston during their recent World Series conquest with many of the Red Sox players sporting facial hair that would have made bearded Civil War combatants proud.  The appearance, including some modest twerking with Carrie Underwood, by Duck Dynasty with Willie Robertson and his fam on the Country Music Awards further popularized canning the razor blades and donning the bandana …

But the shaving continues when it comes to the fundamental analysis of our update batch. We continue (with a few notable exceptions cited below) to see that stealthy reduction of long-term forecasts combining with erosion of 2013 and 2014 consensus estimates on both the top and bottom lines.

And to the U.S. veterans who have served, and their incredible contributions to freedom, whether you decide to sport a moustache, beard or both — we say a simple THANK YOU! from the bottom of our hearts. Simply put, YOU ROCK.

Companies of Interest

There’s a smidge more companies on the “Stronger” line this week, but still nothing to write home about. Microsoft (MSFT) finally received a fundamental upgrade and Priceline’s price surge over the last several months (+61.8% over the trailing 12 months) also merited a closer look and a modest boost. But the trimming continues to far outweigh any boosting as the rhinos seem to refuse to Movember with the rest of a stubbly and grubby nation.

Materially Stronger: Microsoft (MSFT) 2, Priceline (PCLN) 3, Zions Bancorp (ZION)

Materially Weaker: Fusion-IO (FIO), Teradata (TDC) 1, Nuance Communications (NUAN), LinkedIn (LNKD)

1 Teradata (TDC) reduced to $65, from $75, on long-term low price forecast. Annualized return drops from 14% to 10.2%.

2 Microsoft (MSFT) raised from $40 to $45 for long-term low price forecast.

3 Priceline (PCLN) raised from $1265 to $1380 for long-term low price forecast.

Market Barometers

The median Value Line low total return forecast (VLLTR) remains unchanged at 3.9% during this week’s update.

Value Line Low Total Return Screen (5/17/2013)

expectingalpha Stocks , , ,

Companies of Interest

Materially Stronger: Cognizant Technology (CTSH), Legg Mason (LM), ACI Worldwide (ACIW), AON (AON), Amazon (AMZN), Mastercard (MA), Yahoo! (YHOO), Bank of America (BAC), AOL (AOL), LinkedIn (LNKD)

Materially Weaker: Baidu (BIDU), Bank of Hawaii (BOH), RealNetworks (RNWK)

Market Barometers

The Value Line low total return forecast is 6.7%, unchanged from last week.

Shopping By Sector: Technology En Fuego

expectingalpha Stocks , , , , ,
Photo Credit: Tc Morgan via Compfight cc

Where to shop these days?

Start by recognizing where NOT to shop and that’s probably the utility sector. The utility stocks have been en fuego. Don’t shop among the ashes of a bonfire, shop where a flammable pile is smoldering — but distinguish ashes from ignition.

The accompanying table has been sorted from highest potential to lowest potential based on projected annual return (PAR) — the return forecast for the ten traditional sectors from S&P.

Technology stocks worth a closer look: Apple (AAPL), Cognizant Technology (CTSH), Google (GOOG), EMC (EMC), Oracle (ORCL), Qualcomm (QCOM) and Intel (INTC).

Keep in mind that the smoldering might take a while as the often unfriendly (to Tech stocks) days of summer swoop in — for investing for the long term …

Sector gps 20130411

View From The Top Shelf

expectingalpha Stocks , , , , , , ,

Sweet 16: Screening Results (March 2013)

This month features the top percentile of all stocks covered at MANIFEST on the basis of quality (our combination rating of financial strength, earnings stability and relative growth and profitability forecasts). It’s not the customary sixteen stocks or so … but these twelve quality champions are formidable and worthy of a closer look and automatic/perpetual pounce pile status.

Overall Market Expectations

The median projected annual return (MIPAR) for all 2400+ stocks followed by MANIFEST (Solomon database) is 7.2% (2/28/2013). The multi-decade range for this indicator is 0-20% and an average reading since 1999 is 8.5%.

Companies of Interest

With the median return forecast hovering at 7.2%, less than the historical average and nearing historical lows, it makes sense to shop on the top shelf. If prices continue to surge absent any strengthening of fundamentals, the return forecast could get significantly lower. The subtle whittling of expectations (no slashing) continues as we begin the first quarter updates for 2013. Invest in the best (highest quality) but only when they’re suitably on sale.

The top shelf company with the highest fusion rating (combination of fundamental and technical analysis scoring) is Cognizant Technology (CTSH). Cognizant is well-positioned within its industry with a strong track record and stands to benefit as the global recession turns to recovery.

Mesa Labs (MLAB) continues to score well and is one of our favorite companies from this year’s batch of promising small companies from Forbes.

The recent price swoon in Coach (COH) leaves the company with the lowest price-to-fair value ratio (76%) from Morningstar and Standard & Poor’s (83%) among the companies on the top shelf. The price reduction also generates an annualized low total return forecast of 16.4% at Value Line. There’s a rumor floating that somebody thinks all of the purses are a bit pricey … but those crowds of trampling shoppers and a legacy of results suggests that the whole company might be worth buying. I don’t think the price tag hanging on the company is $40-something.

Those return forecasts across the board look pretty good on the top shelf … not a bad idea to start there.

Three Stooge Group in the Windy City

expectingalpha Investing , , , , ,
Photo Credit: twm1340 via Compfight cc

It’s that time of year. It’s in the air. You might even say it’s in the wind.

Whether we wrap the theme around March Madness or simply the advent of educational event season, we spent the weekend in Chicago at an investing conference developed and delivered by a coalition of local investment education volunteers. The Chicagoland Investment Conference was well done and kudos to the team. Ken Kavula and I are honored to be invited and included in the festivities.

Howard “Bunny” Mack. Photo Credit: Deb Severson

Speaking of madness, I’m not sure we can take the master of ceremonies (Howard Mack, President – Chicagoland Chapter) all too seriously when he’s trotting around wearing Trix rabbit ears (General Mills presented at the event) while channeling Playboy bunnies and referring to the closing Stock Talk panel participants as “Three Stooges” but he did. Seriously, the crowd seemed to enjoy the banter and discussions as Ken Kavula, Mark Robertson and Doug Gerlach shared some thoughts and stock study ideas to take home.

Ken Kavula reminded the audience of successful selections made at one of the inaugural Stock Talk panels at the Chicago National Convention for NAIC held in Schaumburg a few years ago. See BINC Stock Talk 2008

Most of all, this Stock Talk panel reminds and underscores why-we-gather and emphasizes the power of what-we-do gathered in community, sharing and exploring investment ideas.

Doug Gerlach, Ken Kavula and Mark Robertson. Photo Credit: Deb Severson

Ken’s suggestions for the audience included Mesa Labs (MLAB), NIC (EGOV) and  Aerovironment (AVAV). EGOV innovatively pursues IT projects for predominantly state (and local) government agencies — seeking to optimize and improve things like making it easier to drive away with a new driver’s license.

Doug’s study roll call included Echo Global Logistics (ECHO), Yandex (YNDX) and SodaStream (SODA) — and yes, he tied sulzer bottles into the Stooge theme. His final selection was Mistras Group (MG), a worthy engineering & construction company to study.

Any study of ECHO might also include: CH Robinson (CHRW) and Expeditor’s (EXPD).

Mark’s selections included Qualcomm (QCOM) courtesy of Houston’s Anne Manning and the Mid-Michigan Round Table (our monthly stock discovery webcast), AFLAC (AFL) and the hospitalization of the duck … and a nudge to study Cognizant Technology (CTSH) and to explore the other candidates in our Ivory Soap Stock Screen.

At the end of the day, Howard removed the rabbit ears (probably went home and tried to see if they improved his TV reception) and can rest assured that he, Dean Hartley and their Chicago team favorably affected the investing future of at least one person several times over.