Summary Use of model/screens can be helpful but have both advantages and disadvantages. Some of the disadvantages are: incorrect data, value traps, falling knives, high concentrations, etc. An important but ignored problem is that of incorrect data. Even Bloomberg gets it wrong! Examples from author's personal experiences highlight the issues investors should keep … [Read more...]
Reducing position in Xerox
Yesterday I reduced position in the stock at $11.25. This reduction was done to reduce the risk of a potential value trap. The stock remains cheap and the company could have a bright future under an activist or if taken over by another company. Current management is disappointing to say the least. Despite poor performance, they continue to receive fat bonuses as I … [Read more...]
Projections Point To An Overvalued Stock Despite The Tasty London Burger
Summary Company beat expectations but sales outlook in-line with low same store sales. Investors may be facing a 0% return for the next 5 years based on management store growth. Friends in London were not familiar with the brand. Tasty burger priced between McDonald's and a slightly better bar/restaurant place. There has been a lot of hype around Shake Shack … [Read more...]
O’Shaughnessy’s Value Composite Model
Last month, I did a review of O'Shaughnessy investment classic "What Works on Wall Street". It’s only fitting that this month I present one of O'Shaughnessy’s multi-factor models. This can easy be used as a starting point to find a potential investment. After running the model, an investor can do traditional bottoms-up analysis to pick the best opportunities. Or even apply … [Read more...]
Use O’Shaughnessy’s Screen To Find Value
Summary O'Shaughnessy's book "What Works on Wall Street" backtests single and multi-factor models. Rather than using a single factor (eg. P/E), you can improve performance by using O'Shaughnessy's composite model. This is an efficient way for an investor to generate investment ideas. An investor can overlay an additional model as a further filter such as Piotroski's … [Read more...]
