Fave Five (8/19/2016)

Fave Five (8/19/2016)

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. This week’s batch is a nod to Cy Lynch and Anne Manning who prefer considerable financial strength when return forecasts ebb lower. We also required top quintile EPS Stability — for dividend lovers, a bedrock of EPS is the source of dividends (along with the company check book.) Some of these are flying at lower altitudes — an acceptable condition for core positions but Morningstar believes all five have the potential to outperform the market over the long term.

The Fave Five This Week

  • Alphabet/Google (GOOG)
  • Cognizant Technology (CTSH)
  • Granger, W.W. (GWW)
  • Microsoft (MSFT)
  • Novartis (NVS)

Context: The average 1-year total return forecast (via ACE) for the Value Line 1700 is 14.2%. The average 5-year return forecast for $VLE is 6.6% (annualized).

The Long and Short of This Week’s Fave Five

The Long & Short. (August 19, 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 return for the Weekend Warrior tracking portfolio is 11.6% since inception. 43.2% of selections have outperformed the Wilshire 5000 since original selection.

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

MANIFEST 40 (3/31/2016)

Your Most Widely-Followed Stocks: An Update

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

The 40 stocks are something of a barometer because we know that these community favorites are not simply followed … most of them are also widely owned, with considerable diligence and vigilance.

MANIFEST 40 (March 2016). Performance Results. These are the most widely followed stocks by Manifest Investing subscribers. Current leader Apple (AAPL) was added on 9/24/2009 and steadily climbed the ranks while generating a relative return of +20.3% (annualized) since then. Figures in parentheses are the ranking back in December 2015.

The rate of return is 9.0% since inception (9/30/2005). Bottom line? On an annualized basis, your community favorites have beaten the Wilshire 5000 by +3.6 percentage points — a relative, or excess, return that probably portends outsized success with our actual portfolios.

Quality (90) is solid and the overall return forecast (8.9%) is positioned to outperform the Wilshire 5000. At an average sales growth forecast of 6.8%, we’d to see some faster-growing companies adopted by our community.

Capturing Attention: Chargers

Gilead Sciences (GILD) moved from #25 to #22 as most of the list remained rather steady. Visa (V) is a new addition at #40. The results of $100 positions investing in any of the Top 40 companies can be viewed at any time via the public dashboard on the home page.

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

The Stocks We Follow (MANIFEST 40)

 

 

We launched the MANIFEST 40 in October 2005, built from the stocks that most frequently appear on subscriber dashboards, and this active and continuously maintained tracking dashboard has delivered a rate of return of 9.2% since inception.

The 40 stocks are something of a barometer because we know that these community favorites are not simply followed … most of them are also widely owned, with considerable diligence and vigilance. Bottom line? On an annualized basis, your community favorites have beaten the Wilshire 5000 by +3.4 percentage points — a relative return that nurtures smiles and bolsters the returns of our actual portfolios.

The average sales growth forecast of the portfolio (6.7%) suggests that it is dominated by the “Up, Straight and Parallel” core contributors. Quality (90) is solid and the overall return forecast (9.7%) is positioned to outperform the Wilshire 5000. We’d like to see the community discover and follow some smaller, faster-growing companies.

Performance Results

The absolute rate of return for the trailing 10 years is 9.2%.

Capturing Attention: Chargers

Gilead Sciences (GILD) moved from #29 to #25 as most of the list remained rather steady. Fastenal (FAST) shuffled up to #4 and Johnson & Johnson (JNJ) dropped a couple of positions. 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

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

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

The Stocks We Follow (MANIFEST 40)

Perspectives

MANIFEST 40 Update

Our MANIFEST 40 is a celebration of collective excellence in stock selection, strategy and disciplined patience. We continuously monitor the 40 most-widely followed stocks by our community of subscribers at Manifest Investing.

“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.”

This managed “tracking portfolio” of your collective favorites has outperformed the Wilshire 5000 by +3.3%. The absolute rate of return for the trailing 9.5 years is 9.6%.

Capturing Attention: Chargers

QUALCOMM (QCOM) continues to ascend, moving from #12 to #11. CVS Health (CVS) has been bolstered of late and moves from #38 to #37.

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

Newcomer

T. Rowe Price (TROW) is a newcomer to the MANIFEST 40. The company was featured in Solomon Select in the July 2014 issue and has been discussed during a number of Round Tables and during other events. The asset manager is highly regarded in this long-term investing community and has been a favorite for decades.

Strongest Performers

The three top performers in the MANIFEST 40 since inception, based on annualized relative rate of return, are Cognizant Technology (+30.7%!), Apple (27.5%), PRA Group (20.2%).

The charter members of the MANIFEST 40: Microsoft (3), Stryker (4), AFLAC (5), Johnson & Johnson (6), General Electric (7), Cisco Systems (10), Walgreen (12), FactSet Research (13), Oracle Corp (17), PepsiCo (18), Teva Pharmaceutical (20), Intel Corp (22), Medtronic (23), Danaher (27) and Wal-Mart (33).

We’ll continue to pay the most attention to these community favorites. Keep up the good hunting!

More Fun With The MANIFEST 40

Here’s the listing (ranked from Most Widely Held, Descending) with a display of Opinions on Parade courtesy of Manifest Investing (consensus-based), Value Line, Morningstar, Standard & Poor’s, Analyst Consensus Estimates and Goldman Sachs.

Mi 40 opinions 20150410

Tin Cup Update

“I would be a bum on the street corner with a tin cup if markets were efficient.” — Warren Buffett

This demonstration portfolio invests the maximum allowable 401(k) in stocks. Total assets reached $1,000,000 in 17 years. Tin Cup has outperformed the S&P 500 since inception (1995) and the annualized total return is now 18.6% vs. 9.9% for the S&P 500.

The total return for the trailing year for Tin Cup is 20.1% versus 13.9% for the Wilshire 5000 (VTSMX).

Tin cup vs vtsmx 20150301

And not to “jinx” the free throw shooter during March Madness … but we can probably start thinking $2,000,000 count down fairly soon.  The second million won’t take nearly as long as the first.

Tracking portfolio for Tin Cup: https://www.manifestinvesting.com/dashboards/public/tin-cup

Shopping in the Dow 30 Aisle

Diamond (DIA) Expectations

The last few years have been pretty good to the Dow 30 stocks — after spending the first ten years of this century in the dog house. The trailing 5-year annualized return is 15.0% versus the Wilshire 5000 at 16.8%. So the other 4970 stocks have actually continued to outshine the Dow 30.

One of the things we’ve noticed is that the renaissance of many of these stocks has persisted — with continuing improvement in profitability, etc. — while many companies are under more margin pressure and “deceleration.”

Here’s a quick look at our 5-year forecasts for the Dow 30 as well as the Value Line low total return 3-5 year forecast. We’ve also included a quick look at Morningstar and S&P price-to-fair value (P/FV) metrics. (100% = fairly valued … <100% is potentially attractive)

In keeping with some of the Groundhog shopping, we also display the 1-year outlooks based on analyst consensus and S&P target prices.

Nutshell: Microsoft (MSFT) and General Electric (GE) are consensus favorites. S&P thinks JP Morgan (JPM) is a steal. There’s an IBM (IBM) bandwagon at Morningstar. Value Line is skeptical about the long-term forecast for Disney (DIS), Cisco Systems (CSCO) and Home Depot (HD). S&P doesn’t want Coca-Cola (KO) … not even with a 10-foot pole. Morningstar thinks United Health (UNH) is overvalued, too. S&P is scratching their heads over Exxon Mobil (XOM) and Chevron (CVX) … and we’ll stay tuned to see what conclusions are reached by Team Stovall.

Djia consensus 20150206