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MagicDiligence (< 20)

May 2012



Cost Structure Analysis: Fixed vs. Variable

May 29, 2012 – Comments (0) | RELATED TICKERS: KLIC , KRO

There's no two ways about it: the Magic Formula® Investing (MFI) strategy turns up a lot of cyclical stocks. A cyclical stock is a company that experiences wider-than-normal variations in its level of sales, due to the inherent boom-and-bust nature of its underlying industry and, sometimes, the overall macro economic conditions in the world. Usually, MFI will turn up a cyclical stock well into the boom portion of the cycle, after above-average profits have been booked but right about when investors think the boom will moderate or end, which brings the stock price down. Bingo, the magical combination of a high earnings yield and a high return on capital.  [more]



Magic Formula Investing Weekly Roundu 5/13/2012

May 13, 2012 – Comments (0) | RELATED TICKERS: ABC , MCK , TW.DL

Magic Formula Investing (MFI), as described by hedge fund manager Joel Greenblatt in The Little Book that Beats the Market, consists of ranking stocks by earnings yield (cheap) and return on capital (quality), adding the rankings together, and buying from the resulting lists. Below are stocks that have moved into, and dropped out of, 3 of the MFI screens used by MagicDiligence:  [more]

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