Magic Formula Investing Weekly Roundup 10/9/2011
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:
Gentiva Health Services Inc (GTIV)
LHC Group Inc (LHCG)
Metropolitan Health Networks Inc (MDF)
Dropping out of the 50 over 50 million screen:
Deluxe Corp (DLX)
DeVry Inc (DV)
Providence Service Corp (The) (PRSC)
Entering the 50 over 1 billion screen:
Deluxe Corp (DLX)
GT Solar International Inc (GTAT)Par Pharmaceutical Companies Inc (PRX)Strayer Education Inc (STRA)
Dropping out of the 50 over 1 billion screen:
CA Inc (CA)
Fluor Corp. (FLR)Lear Corp (LEA)
Myriad Genetics Inc (MYGN)
Entering the 30 over 3 billion screen:
Liberty Media Corp Starz Group (LSTZA)
Dropping out of the 30 over 3 billion screen:
Marvell Technology Group Ltd (MRVL)
Some news and links from around the Magic Formula "universe":
Senate Cites Medicare Abuses By Home Health Firms
Pretty damning evidence on Amedisys (AMED), Gentiva (GTIV), and LHC Group (LHCG). It remains to be seen what punishments or effects this investigation will lead to.
Almost Family Comments On Senate Finance Committee Report
Almost Family (AFAM) is the clean player in home health after the Senate investigation. Whether that gives the company any advantages, such as avoiding fines, is yet to be seen.
McGraw-Hill Sells 9 Television Stations to E.W. Scripps for $212 Million
McGraw-Hill (MHP) continues to take focused steps towards the spin-off of the education group. The Broadcast unit continues to be sold off piecemeal. McGraw got a pretty good price for 9 TV stations.
Gannett Names Gracia Martore CEO as Craig Dubow Resigns Citing Disability
Dubow has had medical problems for years, so this is no surprise. Martore faces immense challenges at this newspaper publisher.
Disclosure: Steve owns AFAM