This is the final in a line of liquidation based posts. In earlier posts we have discussed the best way of calculating liquidation value. Naturally, Ben Grahams name was mentioned as the liquidation expert. Despite an established expert on the subject, I thought it would be interesting to develop my own formula based on the feedback from several of our own experts here on caps (bulshibabo, wolfhounds, portefeuille, jmt587, mrindependant, ultracontrarian, tigerpack and others).
I created two portfolios to test Ben Grahams method against the one we developed. Both started today, both selected stocks out of the same pool, and both only selected stocks that were shown to be undervalued from the liquidation test. A lot of these stocks will be common between both groups and a lot of the other stocks were not pickable in caps. I ordered the stocks from most undervalued to least undervalued in both lists. Also last week I started the wickedation portfolio based on a mix of the justliquidation calculation and my anticitrade algorithm
Benliquidation - Based on Ben Graham's liquidation
(Total current Assets-Total Liabilites)/Shares
GSIG, CABL, MAD, CRC, XING, SIG, INTT, TWMC, NWD, ACLS, TRAC, TAIT, HRSH, MEAD, CRV, HMNA, LKI, PARL, EONC, LOAN, CALC, NLST, SGMA, ORS, COBR, CLZR, ORXE, TGAL, TBAC, AMCE, ENWV, ADGF, SVLF, MSN, AVTR, FNET, ZOOM, PLNR, QXM, SPDE, SYNX, HWG, ROX, KTCC, PIII, HDNG, WEX, FORD, HILL, CNVR, SYMX, NSYS, RCMT, EDEN, ROFO, RELL, LIVE, ARCW, CTHR, BNSO, NUHC, NTZ, GAI, EFJI, PGLA, CAPS, GRO, TGIS, NYER, SIMO, FLXS, SYI, OPXT, MGT, IKAN, NINE, FEIM, LIMC, HLYS, MHO, HSWI, WLDN, TIII, JADE, GENC, PXG, TSRI, TPTX, DRAM, VRAZ, UPG, NCST, SWIR, ACTS, NRGN, PHHM, CNTF, VOCL, HHGP, LTON, VPF, CPRX, ECGI, DITC, TTIL, RITT, HIHO, SOAP, YMI, ATHX, INHX, DUCK, IGOI, ICCC, SCX, TRID, AEHR, FMTI, CUO, VIMC, ATV, ABTL, TSC, PRCP, PFIN, PFSW, VOL, ANGN, JCTCF, OICO, MACE, VOXX, PNS, CSPI, SINO, TRT, SLTC, PRLS, IMN, PTIX, TOMO, CNIC, TATTF, TRCI, FSII, ADPT, NED, LDIS, ICGN, NCTY, AXTI, NYFX, ACAT, HZO, WTT, HEPH, CYNO, IOT, LOOK, LAKE, UUU, FRD, TLGD, UWN, VII, EFOI, IMR, DYII, ACMR, RFIL, CAMT, GIGA, ASYS, DCU, ASB, ATRM, AIRT, ZAP, WGA, CVR, GBR, ANLY, ANTP, ASUR, TSTC, ISR, EDAP, HRT, MTSN, PLUG, BHS, KSW, NSUR, TCM, NENG, SIMG, PDII, PCCC, RCKY, DSWL, AVGN
Justliquidation - Based on our calculation of liquidation
((Total assets-Intangibles-0.5*Net PPE-0.5*Inventory-0.15*Accts Receivable-0.5*Other Long Term Assets)-(Total Liabilities))/Shares
MAD, GSIG, CABL, BWTR, XING, CRC, INTT, NWD, CTHR, XJT, CEP, ACLS, NLST, PINN, VRTA, SIG, TRAC, AWX, LOAN, FNET, ORXE, HMNA, AMCE, SYMX, AHC, NTZ, TAIT, SPDE, ENWV, TV, QXM, CLZR, LIVE, ORS, MSN, MEAD, CNVR, HMY, GAI, HRSH, TGAL, TORM, EDEN, FORD, NINE, PARL, TA, WEX, TIII, TRT, ARCW, TGIS, GRO, PGLA, CAPS, GBR, RCMT, SYI, NCST, HILL, SIMO, MGT, USEG, TTIL, STRC, SCX, ZOOM, TBAC, CAMT, ICCC, UWN, PIII, ATHX, HSWI, HWG, AVTR, DRAM, ADGF, NRGN, VOCL, IKAN, WLDN, NYFX, ISR, FFHL, TPTX, TRID, ACTS, BNSO, PLNR, HLYS, MACE, HHGP, IOT, SOAP, CNTF, INHX, ECGI, CPRX, CUO, OPXT, ASB, VPF, EDCI, FEIM, SYNX, HKN, SWIR, YMI, DSWL, ROX, LTON, TSRI, NCTY, KAZ, ABTL, NGD, PRCP, KRY, DITC, LIMC, VIMC, BRNC, GENC, SINO, UUU, TSC, ICGN, ATV, EDGW, SLTC, ABIO, MSC, LDIS, ADPT, XPRT, VRAZ, ECTX, DYII, OPTT, PRLS, CNIC, TECUA, EONC, SGMA, IGOI, HRT, HIHO, LOOK, HEPH, PTIX, CVR, ORBC, OPMR, RVP, PLUG, DII, NSUR, NED, UAHC, AEHR, NTE, CYNO, TCM, MPAC, COBR, EGT, AXTI, WTT, IMR, KDE, RITT, OICO, FSII, ZAP, ASUR, IDSY, VOL, ADL, BNX, BSET, FRD, KTCC, STRT, TOMO, SIMG, TSCM, OBAS, TECUB, PDII, ISSI, TLGD, FLXS, QLTI, GU, AVGN, TMNG, ANGN, JCTCF, QBAK, RMX, GRVY
Wickedation - Based on a combination of anticitrade and our calculation of liquidation (started last week)
=(%Undervalued according to Anticitrade*%Undervalued according to my liquidation calculation)^0.5-1
Coincidentally, the wickedation portfolio (started July 22nd) is now ranked 82.69 with a 58.5% accuracy.
Let me know your thoughts. (I am not recommending any of these stocks, but just testing these two mechanical methods against each other in an imperfect test) [more]