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MagicDiligence (< 20)

Magic Formula Investing Weekly Roundup 9/25/2011

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September 25, 2011 – Comments (0) | RELATED TICKERS: VECO , HPQ

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:

Entering the 50 over 50 million screen:

Vonage Holdings Corp (VG)

Dropping out of the 50 over 50 million screen:

Great Northern Iron Ore Properties (GNI)

Entering the 50 over 1 billion screen:

Sotheby's (BID)
CACI International Inc. (CACI)
Freeport-McMoran Copper & Gold Inc. (FCX)
Lear Corp (LEA)
Lexmark International Inc. (LXK)
MAXIMUS Inc. (MMS)
Myriad Genetics Inc (MYGN)
QLogic Corp (QLGC)
TRW Automotive Holdings Corp (TRW)

Dropping out of the 50 over 1 billion screen:

CA Inc (CA)
Deluxe Corp (DLX)
Lorillard Inc (LO)
Meredith Corp (MDP)
Marvell Technology Group Ltd (MRVL)
OmniVision Technologies Inc (OVTI)
Par Pharmaceutical Companies Inc (PRX)
Strayer Education Inc (STRA)
Valassis Communications Inc. (VCI)

Entering the 30 over 3 billion screen:

Harris Corp (HRS)
Lockheed Martin Corp (LMT)

Dropping out of the 30 over 3 billion screen:

Cephalon Inc (CEPH)
Gilead Sciences Inc (GILD)

News and Links on Magic Formula stocks this week...

LED Makers Struggle as Emerging Market Demand Plummets

Something to watch, although Veeco Instruments (VECO) recently affirmed their prior guidance for the year. I usually take a wait-and-see approach on these analysts reports, they often do not agree with what management says.

HP: Whitman is an Odd Choice

Is there any Board of Directors more dysfunctional than Hewlett-Packard's (HPQ)? Letting go of successful CEO Mark Hurd was dumb, hiring Leo Apotheker was even dumber, and Whitman is indeed an odd choice considering her limited experience in hardware. This is a case of a once-great company shooting itself in the foot, repeatedly.

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