This Week at MANIFEST (2/21/2014)

Turning The Page

It’s that time of year when Value Line ratchets ahead to the next year on their 3-5 year forecasts. It’s also time when the analyst consensus estimates at places like finance.yahoo.com begin to provide sales and earnings forecasts for 2015.

At Manifest Investing, we’ve long held the belief that these forecasts should be embedded in our assessment of the long-term trend and characteristics … and we commence doing precisely that. The rear view mirror is important. We’re not saying that investors should ignore the road behind companies — just that a prudent amount of emphasis on the windshield is also important.

Stocks to Study

The Issue 1 update companies in the accompanying chart have the highest rankings based on the combination of return forecast and quality ranking. This display was inspired (and requested) by Irina Clements in our Saturday morning session this past weekend — A Few Moments With … Sandboxes.

The companies are ranked in descending order of Combination Rank with a minimum of 90 (top decile) of all stocks covered. The underlying fundamentals (growth, profitability and projected average P/E ratio) are displayed along with the analysis opinions of Value Line, Morningstar and S&P.

Mindray Medical (MR)

Mindray Medical (MR) is a developer, manufacturer and marketer of medical devices. From its main engineering and manufacturing base in China, and through a global distribution network, Mindray supplies a broad range of products across three segments:

  • Patient monitoring and life-support products
  • In-Vitro diagnostics
  • Medical imaging systems

 

Nothing wrong with these fundamentals … trends in place, growth at 15%, net margin forecast at 18% and a reasonable projected average P/E in the 20x range.

The recent price gains have “consumed” some of the return forecast — but the PAR is still at relatively high levels, particularly when considering the median return forecast (MIPAR) is near 6%.

Although Mindray is pushing towards long-term resistance and an overbought RSI, there’s a chance that the persistent fundamentals (see business model analysis) will finally “take out” the resistance level. Momentum (ROC) has been strong so we disregard the RSI levels.

Mr 10yr 20130510

Ira Sohn Stock Selections (2013)

 

About The Conference

Since 1996, the world-renowned Sohn Investment Conference has been the premier investment forum, bringing together the world’s savviest investors to share fresh insights and strategies in support of pediatric cancer research and treatment.

Wall Street’s best and brightest investors participate in this unique, “must attend” event to share their expertise with an audience of more than 3,000 people, comprised of portfolio managers, asset allocators and private investors. Most speakers manage large proprietary investment portfolios that have outperformed the market for many years and do not share their insights in any public forum, but they volunteer their time to the Conference for the benefit of the Foundation. All contributions support the Foundation’s mission to support pediatric research and care.

Notes From The Ira Sohn Conference 2013 (via Joshua Brown)

Motley Fool – Sohn Ideas

Gundlach shorts Chipotle, Einhorn goes OIS (Forbes)

WSJ’s Live Blog (Wall Street Journal)

Lincoln center sohn 2013

I wasn’t invited to share any investment ideas, at least not until next year — so here’s my 2013 Sohn Shopping List — we’ll take a look at some of these.

These screening results are based on:

  • MANIFEST Rank in top percentile (MANIFEST Ranking >= 99)
  • Positive Price Momentum (Rate-of-Change, ROC, technical indicator)
  • Positive Price Pressure (based on PnF price target vs. current price)

Sohn shopping 20130510

Here’s the roll call of selections based on $100 invested in each idea at the close on 5/7/2013 (immediately preceding the conference). Note that a number of selections are not covered (at least not yet) by MANIFEST and that the entries in red are short sale suggestions by Messrs. Chanos, Gundlach and Jacobson. It’s not unusual to see an event or listing of stocks like these hedge fund selections to include a number of Jeremy Grantham’s flaky stocks.

And Ackman’s selection of Procter & Gamble (PG)? C’mon, man. Ack. We can only assume he’s too preoccupied with his Icahn jousts to avoid phoning it in. Nothing against PG, great company, but at a return forecast in low single digits?

Mindray Medical (MR) is our entry with honorable mention to Fossil (FOSL) and Synchronoss Tech (SNCR).

http://www.marketfolly.com/2013/05/notes-from-ira-sohn-conference-2013.html