Fave Five (1/13/2017)
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 average 1-year ACE total return forecast is 8.0%.
This week we take a slight departure to pay homage to remarks made by Jeff Gundlach during the DoubleLine “Just Markets” webcast on Tuesday. Specifically, the macro observations included a nudge to consider equities in places like India and Japan, suggesting that U.S./Canada valuations might be getting a little steep.
Turning attention to the universe of stocks outside the U.S. & Canada, we find another “Lost Decade.” The stocks in the Morgan Stanley iShares MSCI EAFE exchange traded fund (EFA) have delivered a -0.6% return ANNUALIZED since 2007 while the Wilshire 5000 checks in at 7.3%. So we went searching for the highest ranked stocks that call an address “home” outside either Canada or the United States.
We granted Stella-Jones (SJ-TO) an exception in honor of Jeremy Grantham’s honorary timber class.
For more information on joining our 11th annual Groundhog Challenge, launching 2/2/2017, as either a group or an individual investor, drop a note to firstname.lastname@example.org.
The Fave Five This Week
- Baidu (BIDU)
- Infosys Tech (INFY)
- MercadoLibre (MELI)
- Stella-Jones (SJ-TO)
- Teva Pharma (TEVA)
The Long and Short of This Week’s Fave Five
The Long & Short. (January 13, 2017) 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.
Fave Five Legacy (Tracking Portfolio)
The relative/excess return for the Fave Five tracking portfolio is +3.6% since inception. 45.1% of selections have outperformed the Wilshire 5000 since original selection.
Tracking Dashboard: https://www.manifestinvesting.com/dashboards/public/fave-five