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MagicDiligence (< 20)

August 2011

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The Intelligence Report on ManTech International

August 31, 2011 – Comments (0) | RELATED TICKERS: MANT , NOC , GD

A large percentage of Magic Formula Investing (MFI) at current is composed of defense contracting firms, from the huge "big 5" players like Northrup Grumman (NOC) and General Dynamics (GD) to smaller, more focused firms such as Cubic (CUB) and today's stock in focus, ManTech (MANT).

ManTech is a smaller, more specialized contractor. The firm focuses on a few areas. Command, Control, Computers, Communications, Intelligence, Surveillance and Reconnaissance, known as "C4ISR" to the acronym-obsessed Department of Defense (DoD, natch), is a wide-ranging set of services from developing technology plans, to training, to maintenance and beyond. Cyber Security involves protecting military, law enforcement, health, and other critical and classified networks from security threats. Global Logistics is just what it sounds like - supply chain management, maintenance of vehicles and equipment, and operations support. Intelligence Solutions comprises of services including secure information sharing, network engineering, and data mining and analysis. Information Technology services and Systems Engineering round out the portfolio.  [more]

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3 Replacement Stocks for Magic Formula Investing

August 25, 2011 – Comments (0) | RELATED TICKERS: PERI , BBRY , ASYS

MagicDiligence is getting out the chef's hat and apron today and going to work cooking up a new Magic Formula Investing (MFI) dish for investors to taste! Joel Greenblatt, the founder of MFI, explained the strategy in somewhat broad terms in his book The Little Book that Beats the Market, but the exact calculations have always been a bit of a mystery. We know the spirit of the two statistics. Earnings yield is defined as (EBIT / Enterprise value). Return on capital is defined as (EBIT /Tangible invested capital). Many have tried to duplicate it, and MagicDiligence too has tools to calculate MFI statistics for any stock.

   [more]

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Magic Formula Links for 8/23/2011

August 23, 2011 – Comments (0) | RELATED TICKERS: HPQ , HRB , LPS

In the Magic Formula universe today...

As Hewlett-Packard Turns...  [more]

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Cray - Are Supercomputers a Super Business?

August 23, 2011 – Comments (0) | RELATED TICKERS: CRAY

When you say the word "super-computer", one name comes to mind - Cray (CRAY). The firm is synonymous with high performance computing. Founded in the early 1970's by Seymour Cray, the company's first computer, the Cray-1, was renowned as the world's fastest computer, achieving fame during the Cold War when the first unit was installed at Los Alamos during the height of nuclear proliferation.

The firm has been through quite a few changes since those days. After merging with Silicon Graphics in the late 1990's, SGI then sold it to Tera Computer in 2000, after which Tera changed its name to Cray and operates as the stock we review here.  [more]

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Magic Formula Links for 8/22/2011

August 22, 2011 – Comments (0) | RELATED TICKERS: MHFI , GTATQ , QLGC

New to MagicDiligence - a daily roundup of all interesting and important news concerning current Magic Formula stocks! As typical for a Monday, several items to mention today:

Major investors in McGraw-Hill continue to press for a split-up of the business, particularly the struggling education unit and the largely unrelated media and information business. Also today, S&P head Deven Sharma has resigned... curious timing, considering the uproar over S&P's unilateral downgrade of U.S. debt earlier this month:  [more]

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Magic Formula Investing Weekly Roundup 8/21/2011

August 21, 2011 – Comments (2) | RELATED TICKERS: ATVI , FCX , LEA

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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Contesting the Market's Reaction to Dell's Earnings

August 17, 2011 – Comments (0) | RELATED TICKERS: DELL.DL

Boy, what an awful quarter for Dell (DELL), eh?:  [more]

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The Google/Motorola Deal Could Affect 4 Magic Formula Stocks

August 16, 2011 – Comments (0) | RELATED TICKERS: IDCC , MSFT , GOOGL

Yesterday, Google (GOOG) shocked the world with its announcement of a $12.5 billion acquisition of Motorola Mobility (MMI). The deal was a surprise to me as well. It was well-known that Google was looking to add patents to fend off challenges from Apple (AAPL) and Microsoft (MSFT) (among others), but for Google to outright purchase one of their OEMs for the Android operating system was a surprise. It puts Google into the low-margin, cutthroat hardware business (way outside of the company's core competencies), and also into direct competition with Android phone giants like Samsung and HTC.  [more]

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Magic Formula Investing Weekly Roundup 8/14/2011

August 14, 2011 – Comments (0) | RELATED TICKERS: DISH , QLGC , COOL

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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Did S&P Just Shoot Itself in the Foot?

August 09, 2011 – Comments (1) | RELATED TICKERS: MHFI , MCO

By now everyone knows the news. Last Friday evening, Standard & Poor's (S&P) downgraded the U.S. credit rating from the highest "AAA" rating down to "AA+". It was the first time in history that U.S. municipal debt did not garner the top credit rating from all 3 major ratings services. Additionally, S&P assigned a "negative" outlook to the rating, indicating that yet another downgrade is possible within the next 12-18 months.

The implications obviously are wide reaching. Treasury bonds have always been considered the standard for "risk-free" investment, but now they are considered more risky than the public debt of Canada, France, Germany, or for that matter, the corporate debt of Microsoft (MSFT)! As a result of the downgrade, it is possible that treasury yields could increase 0.5% or more to offset the "risk". Also, of no small consequence, it is also extraordinarily embarrassing to the country and to government officials in particular.  [more]

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Magic Formula Investing Weekly Roundup 8/7/2011

August 07, 2011 – Comments (0) | RELATED TICKERS: GD , GRMN , LLY

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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The Debt Ceiling Deal's Effect on Magic Formula Stocks

August 03, 2011 – Comments (2) | RELATED TICKERS: NOC , AFAM , APOL

Congress finally got serious on Tuesday and passed the raising of the debt ceiling, allowing the government to continue its addiction to debt and preventing a default on that entity's numerous bills. Any publicly traded business run the way the federal government is run would quickly find itself on the pink sheets (or in bankruptcy court), but I digress.

In a nutshell, the deal allows the federal government to raise the debt ceiling by $2.4 trillion dollars. To balance this act, an initial $917 billion in spending cuts over the next 10 years is in the bill. Additionally, a congressional committee will be appointed to find another $1.5 trillion in spending to cut, by Thanksgiving of this year. If the committee does not come to an agreement, a pre-arranged set of spending cuts will kick in (the "trigger cuts").  [more]

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