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 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.

Value Line Low Total Return Screen (2/22/2013)

We can’t help but take a closer look at the “dent” put in the long-term forecast for Landauer (LDR) — a recent favorite and a stock that we’ve featured in a number of venues. Is there any cause for concern or muted expectations?

The return forecasts for all of the electric utilities in this update are pretty weak and to yield chasers out there … don’t forget to keep total return expectations in your framework. We’ll take closer look at the electric utility industry also.

It was also nice to see long-time community favorite II-VI (IIVI) get a boost this week.

Materially Stronger: Badger Meter (BMI), Cooper (COO), Cutera (CUTR), Idexx Labs (IDXX), Two Six II-VI (IIVI), Manitowac (MTW), Newport (NEWP), Oshkosh (OSK), Toyota Motors ( TM )

Materially Weaker: Excelon (EXC), First Energy (FE), Landauer (LDR), PPL (PPL)

Market Barometers

The Value Line low total return (VLLTR) forecast held steady at 7.3% this week.