Fave Five (9/7/2018): Morningstar

Fave Five (9/7/2018)

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 median 1-year ACE total return forecast is 10.0%.

This week we limit the field to companies with excellent quality (>80) with the lowest price-to-fair value ratios (P/FV) according to Morningstar.

The Long and Short of This Week’s Fave Five

Long & Short Term Perspectives. (September 7, 2018) 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. 52-Week Position: Position on scale between 52-week low price and 52-week target price. 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.

McKesson (MCK) is on “wash sale probation” as it was sold on 8/31/2018 and is unavailable to the tracking portfolio until October.

Intel (INTC) is one of our favorite examples of stock prices that seem to move in “fits and starts.” The company is currently #26 among the most widely-followed stocks by Manifest Investing subscribers and has generally tracked the market (8% annualized total return) since charter membership in the MANIFEST 40 back on 9/30/2005. Intel (INTC) spent four years on the Round Table roster after selection by Hugh McManus and Mark Robertson back on 3/26/2013. The rate of return when sold on 12/19/2017 was 21.6% — beating the Wilshire 5000 by 9.5 percentage points.

Looking down the top (50) stocks that met this week’s criterion, we were struck by the number of Ken Kavula nominations for the Round Table in the field. Perhaps Morningstar gives extra credit for “up, straight and parallel,” too? A recent example is the laser purveyor, Coherent (COHR). The company was featured (by Ken) during the July 2018 Round Table.

Stericycle (SRCL) has been in the Fave Five tracking portfolio since 12/8/2017 and has stumbled to a relative return of -16.7%. Yes, Virginia, SRCL is on the Rule-of-5 hot seat but they may still stick the landing and commence recovery.

NutriSystem (NTRI) is #4 on our Best Small Companies list for 2018 and was added to the Fave Five tracking portfolio on 3/22/2018. NTRI has delivered a healthy return, 32.1% since then. Bring out your best small companies ideas as we build and share the Best Small Companies (2019 edition) around Halloween. Yes, we’re searching haystacks and counting down …

Fave Five Legacy (Tracking Portfolio)

The relative/excess return for the Fave Five tracking portfolio is +3.5% since inception.

The absolute annualized rate of return is 18.9%.

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

Fave Five (3/23/2018)

Fave Five (3/23/2018)

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 median 1-year ACE total return forecast is 16.2%.

Our five stocks this week hail from the top quintile (top 20%) of all stocks ranked by quality. We then sought the five highest 52-week total return forecasts according to analyst consensus.

NutriSystem (NTRI) rejoins the Fave Five tracking portfolio after a brief hiatus. NTRI was selected back on 11/9/2017 and proceeded to recede more than 20% versus the general stock market, so it was jettisoned about a month ago. With the stock price dropping from $51 to $28, we’ll give it another go — but with a careful watch on the quality rating. Slowing of sales growth with 2017 year-end resembling 2016 is causing some consternation and we’ll keep the company under the microscope with the 4/19/2018 update.

CVS Health (CVS) has appeared frequently in Fave Five results and is featured in a number of portfolios, including its #12 ranking in the MANIFEST 40 most widely-followed companies. CVS was first added to the Fave Five tracking portfolio back in December 2015 … and has been fairly disappointing with a return of (-10.1% annualized) since selection. We also note that CVS Health has been showing up on a number of Triple Play screening results, so we’ll continue to hope that earnings will advance … and that stock price will follow EPS.

The Long and Short of This Week’s Fave Five

Long & Short Term Perspectives. (March 23, 2018) 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. 52-Week Position: Position on scale between 52-week low price and 52-week target price. 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.

Fave Five Legacy (Tracking Portfolio)

The relative/excess return for the Fave Five tracking portfolio is +4.7% since inception.

The absolute annualized rate of return is 17.8%.

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

Fave Five: 2018 GH Edition

Fave Five (2/9/2018)

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 median 1-year ACE total return forecast is 14.7%.

By the way, the ferocity of the correction is on full display here, the median 1-year ACE total return was 1.7% just a couple of weeks ago. That reality, the bolstering fundamentals and a relative strength index that is creeping into “oversold territory” are among the reasons that diligent shopping can be pursued.

This week’s Fave Five will be a parade of several of our favorite screens, including the traditional long/short outlook, best in zone, launchpad ready, Triple Play qualified, etc.

Traditional Fave Five: NutriSystems (NTRI)
Best In Zone “Irish Spring”: Prestige Brands (PBH)
Launchpad Worthy?: IMAX (IMAX)
Triple Play Qualifiers: CVS Health (CVS)
Heavy Hogs (2018): ULTA Beauty (ULTA)

The Long and Short of This Week’s Fave Five

Long & Short Term Perspectives. (February 9, 2018) 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. 52-Week Position: Position on scale between 52-week low price and 52-week target price. 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.

Best in Zone — “Irish Spring”

Long & Short Term Perspectives. (February 9, 2018) 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. 52-Week Position: Position on scale between 52-week low price and 52-week target price. 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.

Launchpad Candidates

Reminder: These are companies exhibiting HUGE 2018 EPS forecasts versus 2017 projected/actual results. This is just a one year condition for this screen. Ideally, a stock with multi-year breakthrough and breakout potential could be discovered. Stocks exhibiting these characteristics have delivering participating clubs and individuals to the Groundhog Winner’s Circle in the past.

Triple Play Qualifiers

This group has decent (out-sized) long term return expectations in combination with the potential for P/E expansion and profitability/margin enhancement.

Heavy Hogs (2018)

These are the consensus selections — the most commonly selected stocks — among the Groundhog Challenge entries for 2018.

Fave Five Legacy (Tracking Portfolio)

The relative/excess return for the Fave Five tracking portfolio is +4.8% since inception.

The absolute annualized rate of return is 18.1%.

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