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This Week at MANIFEST (7/29/2016)

We up the ante on last week’s shopping theme as this week’s update includes a mother lode of retail and we resume our monthly shopping fireside chat with Tuesday night’s Round Table.

In order to help our subscribers find the companies that are “way off the map,” we’re expanding and digging into some areas that will provide a wider berth of study opportunities.

MANIFEST 40 Updates

  • 20. Coach (COH)
  • 36. Wal-Mart (WMT)
  • 40. Costco Wholesale (COST)

Round Table Stocks: Coach (COH), Costco Wholesale (COST), Dollar Tree Stores (DLTR), Fossil (FOSL), Hibbett Sporting Goods (HIBB), Vera Bradley (VRA)

Results, Remarks & References

Companies of Interest: Value Line (7/29/2016)

The average Value Line low total return forecast for the companies in this week’s update batch is 6.6% vs. 5.7% for the Value Line 1700 ($VLE).

Materially Stronger: IMAX (IMAX)

Materially Weaker: Conn’s (CONN), Buckle (BKE), Ralph Lauren (RL), Nordstrom (JWN), Penney (JCP), Gap (GPS)

Discontinued: Aeropostale (ARO), Pacific Sunwear (PSUN)

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 5.7%, down from 5.9% 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 (7/29/2016)

The Long & Short. (July 29, 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

“Dump your hedge funds and explore 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.

This Week’s Sources and Suggestions

  • Bob Shaw suggestion for Fox Factory (FOXF) — Thanks, Bob.
  • Value Line Investment Survey (Extended Edition, Issue 7) — Thanks, Ken Kavula

Coverage Initiated/Restored: Fox Factory (FOXF), Bank Mutual (BKMU), ESSA Bancorp (ESSA), First Clover Leaf Financial (FCLF), First Defiance Financial (FDEF), First Savings Financial (FSFG), Greene County Bancorp (GCBC), Home Bancorp (HBCP), Pathfinder Bancorp (PBHC), Timberland Bancorp (TSBK), United Community Bancorp (UCBA)

Goldman Sachs: Buy and Avoid

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This was a tangential subject of discussion during the March Round Table. We’ve added Goldman Sachs price targets and will be monitoring them versus ACE and S&P.

Nutshell: Might this be a way to gauge sentiment? In this case, these differentials could deliver influence or impact, providing a potentially meaningful sentiment indicator.

http://www.bloomberg.com/news/articles/2015-04-02/goldman-here-s-where-u-s-investors-should-put-their-money-for-the-rest-of-the-year

Gs buy avoid list 20150331

As a quick reminder to be careful out there, this is what this morning held for Garmin (GRMN).

That’s a reduction from $63 to $54.

Source: Benzinga.com

Grmn gs opinion 20150402

More Fun With Goldman Sachs

When they’re not doing “God’s work” or referring to retail investors as Muppets, Goldman Sachs (GS) makes some calls — long and short — that can be influential in the market. In some Wall Street circles, the legions of Goldman Sachs are playfully known as Masters of the Universe.

In addition to the two lists shared above, here’s a list of nineteen stocks that Goldman Sachs believes are headed for price swoons — a list of stocks to sell short.

Goldman Sachs offers three criteria on how to pick stocks to short:

  • Look for individual stocks with high valuations that have a tendency to underperform;
  • take hints from mutual funds as they do a good job of selecting shorts;
  • and look for stocks that are likely to move on company-specific factors and are less prone to moving with general market and sector trends.

Among the overvalued stocks Goldman thinks could drop are Celgene (CELG), OReilly Automotive (ORLY) and Red Hat (RHT). Stocks underweight by mutual funds that could fall are HST, CTL and EQR; and likely to deviate from the broad market and their sectors are KLAC, JEC and COH.

Rounding out Goldman’s 19 stock recommendations that could reward short sellers: ARG, DO, DISCA, FLS, KSS, MOS, NDAQ, NVDA, TDC, WU.

Tracking Dashboard: http://www.manifestinvesting.com/dashboards/public/goldman-shorts-20140414

Here are the tracking dashboards for the Goldman MOST UPSIDE and MOST DOWNSIDE stocks as of 3/31/2015:

Triple Play Screen (3/19/2013)

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Photo Credit: Alan Cleaver via Compfight cc

A couple of people have requested a quick triple play screen in the last few days, so we’ll take a closer look.

Companies of Interest: Recent Round Table selection Vera Bradley (VRA) just toggled back to “Bullish” and with fundamentals intact, the price drop could be a sale vs. distressed merchandise. Kohl’s (KSS) was downgraded by JP Morgan this morning — so study carefully and monitor for impact on long-term trends. Coach (COH) continues to be challenged in a challenging retail environment but the news/expectations out of China have been quite good of late. United Health (UNH) has some of the stronger P/E expansion and margin enhancement potential on the list.

Keep in mind that the Triple Play screening criteria is generally most useful in the later stages of a bear market but the concepts are always valid.

Here are the three major Triple Play criteria:

  • Damaged stock price (Elevated return forecast)
  • Potential for profitability improvement (margin expansion)
  • Potential for P/E expansion

Using our stock database:

We begin by limiting the field to companies with Fusion Rankings (a combination of return forecast, quality ranking and technical factors) greater than 80.

We then limit the field to companies with (1) projected P/E ratios greater than current P/E ratios and (2) profitability forecasts greater than current profitability levels. P/E expansion and margin enhancement are both annualized in the results table.

The qualifying companies are sorted (descending) by MANIFEST Rank.