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Investing in Large-Cap Stocks:Rafael Resendes Interview Wall Street Transcript (PDF)
The Value Expectations blog is introducing the Home Run Index "“ a model portfolio that will be updated monthly to contain some of the best ideas from our quantitative research. Our first portfolio is available below. If you have not registered for ValueExpectations.com yet, and would like to continue to receive AFG's Home Run Index to gain access to the companies in next month's portfolio, please register now. On an ongoing basis, we will update performance each month, along with a new set of tickers as these metrics change.
Check out the PDF attached below with the entire list of Home Run Index Companies!
What is a Home Run Index Stock?
AFG's research has identified five factors that consistently identify stocks likely to deliver significant short term over and under performance. Our Home Run Index recommendations rate highly across each of these factors.
Valuation: Identifies companies trading at significant discount to AFG's intrinsic value estimate.
Momentum: Identifies companies with positive Economic Margin Momentum over a three-month window.
Earnings Quality: Identifies companies with strong relationships between their cash flows and net income, based on changes in Net Operating Assets, and avoids companies with high accruals.
Management Quality: Identifies whether corporate management teams are pursuing strategies that create or destroy value.
Price Characteristics: In most markets, we look for stock candidates that exhibit certain traits related to their share price and moving average relationship, but in periods of high market turbulence, we will ignore these metrics until markets recover.
Historical Performance:
The Home Run Index has outperformed the Russell 3000 by 15.0% annually since 9/98, with a monthly outperformance batting average of 66.7%. On average, roughly 103 companies are included in the portfolio each month, with 39 from the Russell 1000 and 64 from the Russell 2000.
Check out the PDF attached below with the entire list of Home Run Index Companies!
Investor Sentiment Survey - Pros vs. Joes
Last year The Applied Finance Group started a professional investor sentiment poll designed to keep the investment community updated on the expectations/predictions of a large and diverse group of investment professionals. The goal of the survey was to prove whether or not the "wisdom of crowds" theory held weight. Author James Surowiecki states in his book "The Wisdom of Crowds" that "groups are remarkably intelligent, and are often smarter than the smartest people in them."
In fact, the Market Forecast Project (MFP) survey has been remarkably accurate in predicting major events in the market. It has helped many of the participants in their portfolio construction process by allowing access into the minds of a large group of investment professionals. By helping them understand the "Crowds" favorite investment ideas, macro-economic sentiment and stock market predictions, The Market Forecast Project has provided money managers an edge in the marketplace.
With this month's MFP we want to see how a group of average Joe individual investors would fare against the investment Pro's who normally take part in our survey. Therefore we are extending our invitation not only to professional money managers, but also to those of you who like to stay up to date with the market and are not actively managing money. Click here to sign up and take part in the survey!
Although It seems logical to assume that the Pro's would be much more accurate in their predictions as it is in their daily routine to research and read up on the topics that we cover, the average Joe has had access to an explosion of available information related to the markets and economy over the last decade. It will be interesting to see the similarities and differences in sentiment between the Pro's vs. Joe's, and how accurate each group's predictions turn out.
If you are a professional investor, or just actively follow the market and would like to participate in this month's issue of the Market Forecast Project"¦ Click here to sign up!
Remember you do not have to be a professional investor to participate in this month's survey!
Benefits of participation in the Market Forecast Project include:
"¢ Understand Trends of Investor Sentiment and Incorporate MFP Forecasts to Better Position your Portfolio
"¢ Enhance Client Communication
"¢ Actionable Long/Short Investment Ideas to help you Outperform!!!
"¢ Use the "Wisdom of crowds" to Gain Insight into Popular Themes and Events in the Market
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Value Expectations Equity Research, provides institutional quality stock research through its investment newsletters and stock blog using AFG’s Economic Margin Framework.
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