December 2010
December 30, 2010 –
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RELATED TICKERS: GTAT
, PWER
Guest contribution provided by Forex Traders. [more]
December 29, 2010 –
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RELATED TICKERS: MGIC
, SPMD
, QCOR
Magic Formula Investing (MFI), the strategy invented by hedge fund manager Joel Greenblatt and covered by MagicDiligence, had a good year in 2010. There were several big winners, a rather limited number of large losers, and as a whole, the strategy delivered its adherents gains solidly beyond that returned by the S&P 500.
Since the "bible" of MFI, The Little Book that Beats the Market, emphasizes including small caps to maximize the strategy's returns, below is a graph that shows the relative performance of MFI's "top 50 stocks over 50 million market cap" screen against the S&P 500 ETF (SPY). The results below assume that all 50 MFI stocks were purchased on a date and held until 12/23, and compares the average performance of all stocks in the screen to buying SPY on the same day. 52 samples were taken, on Wednesday of each week in 2010: [more]
December 26, 2010 –
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RELATED TICKERS: V
, ACN
, ENDP
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]
December 21, 2010 –
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RELATED TICKERS: V
, ARO
, LO
Goodwill is an accounting concept anyone who has investigated financial statements has likely encountered. It usually shows up in the balance sheet as a long-term asset on its own line item entitled, simply, "Goodwill" (or sometimes, "Cost In Excess"). What does this asset value represent?
When a company purchases more than 50% of another company, it is required by accounting laws to consolidate all of the assets and liabilities of the purchased firm. However, it is very rare that an acquiring company pays just book value for another firm. Many companies are bought out at 3, 4, even 10 times book value! This is where the goodwill line item comes in. Any portion of the purchase price in excess of book value is placed into the goodwill account of the acquiring firm's balance sheet. So, in short, goodwill represents the cumulative amount of money paid for acquired assets above their book value. It is a decent shorthand for the amount of value expected to be generated from an acquisition. [more]
December 19, 2010 –
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RELATED TICKERS: V
, HPQ
, CPLA
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]
December 14, 2010 –
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RELATED TICKERS: HRS
, AVNW
, SLB
Harris Corporation (HRS) is a large communications product and services company. It caters primarily to government customers, who account for 80% of revenue, with the U.S. federal government alone representing over 65% of sales.
Harris has three business segments. The largest is Government Communications Systems (GCS), which is just over 50% of sales. This business is quite diverse, ranging from designing and running the Federal Aviation Administration's (FAA) air traffic control systems to instrumentation and avionics for the F-35 jet program to managing information technology for the Veteran's Association's (VA) health care management systems. In all, this segment has over 300 programs. [more]
December 11, 2010 –
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RELATED TICKERS: DGX
, OSK
, MANT
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]
December 07, 2010 –
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RELATED TICKERS: MO
, GME
, DELL
Every so often, MagicDiligence compiles a list of Magic Formula stocks sorted by their dividend yield, price-to-sales ratio, and price-to-book ratio for investors that like to use those metrics. The result is a list of attractive value stocks for additional research. Here are the top 10 in each of the three metrics listed above: [more]
December 05, 2010 –
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RELATED TICKERS: TWX
, MO
, DELL
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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