Tuesday, April 30, 2013
Monday, April 29, 2013
Tuesday, April 23, 2013
Volume 9 : Machinery, Diversified, Brokers
The only one to stand out on the long side is Akamai Technologies (AKAM $34).
Monday, April 22, 2013
Volume 8 - Financial, Basic Materials & Drug stocks
Two stocks stand out: one for being undervalued and having had relatively good performance over the last month and the other with the opposite characteristics.
On the long side, Actavis (ACT $98), the third largest generic drug maker in the world, looks attractive. Estimated earnings and growth from reinvestment are $8.50 and 22% vs implied earnings of $7.21 and 18.8%.
On the short side is Forest Labs (FRX $36). For March 2015, estimated earnings are $1.30, normalized earnings are $2.72 giving a growth rate of 9.7%. The implied equivalents are $4.63 and 17%.
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Robert L. Colby
Sunday, April 21, 2013
Volume 7
Due to poor performance in the Industrial and Technology Sectors and Industries, there are some great values in Volume 7.
Thursday, April 4, 2013
Value Line Technical Rank - a near "perfect" predictor of stock performance
Our recent posting "Monetary stimulus favors poor quality equities" was a reminder of Value Line's Technical Rank and its near "perfect" record of predicting relative performance in the recovery since January '09.
The only imperfection is that it is in the exact opposite order to what one would want to see in a ranking system where 1 is the best and 5 the worst.
These results are based on the linked one month relative returns on the 500 plus stocks that we cover. In addition to keeping our own monthly valuation data, we have kept some Value Line data on these stocks including their Timeliness, Safety and Technical Ranks.
Their definition of the Technical Rank is as follows:
The Value Line Timeliness ranking has a more mixed record.
Like the Technical description, there is no meaningful definition of what goes into the Timeliness equation.
These results are based on the linked one month relative returns on the 500 plus stocks that we cover. In addition to keeping our own monthly valuation data, we have kept some Value Line data on these stocks including their Timeliness, Safety and Technical Ranks.
Their definition of the Technical Rank is as follows:
The Value Line Technical Rank uses a proprietary formula to predict short-term (three to six month) future price returns relative to the Value Line universe. It is the result of an analysis which relates price trends of different durations for a stock during the past year to the relative price changes of the same stock over the succeeding three to six months. The Technical rank is best used as a secondary investment criterion. We do not recommend that it replace the Performance rank. As with the other ranks, the Technical rank goes from 1 (Highest) to 5 (Lowest.)
Robert L. Colby
Wednesday, April 3, 2013
March 31st 2013 performance results
This graph shows the performance of the screens for value over the last 8 1/2 years. The spread between the two had declined to 649 basis points per annum in favor of the Undervalued.
Relative to the S&P 500, the numbers are +5.4% and -1.1% pa. Relative to our universe the numbers are +2.6 vs -3.9%. In absolute terms, $100 is worth $221 vs $129.
The last quarter saw continued out performance by the Overvalued. They averaged +6.4% vs -3.0% relative, or +16.4 to +7.0% in absolute terms. All figures exclude income.
Robert L. Colby
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