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I have adapted many of the findings of James P. O'Shaughnessy's book, What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time to my own investments. One of these strategies includes, at the end of each calendar year, using screens derived from the two best performing strategies in O'Shaughnessy's book to find potential value and growth opportunities for the year ahead.

For those who have not read What Works on Wall Street: A Guide to the Best-Performing Investment Strategies of All Time, O'Shaughnessy used a systematic, fundamental approach, compiling 45 years of S&P Compustat market data to research the performance of many different long term investment strategies. As expected, he concluded that some produced significantly greater returns than the S&P 500 while others produced less.

The two top performing strategies in his book, as mentioned, are O'Shaughnessy's Cornerstone Growth and Cornerstone Value strategies. In his research, these two strategies yielded the strongest and most consistent long term returns and, since the publications of his book, have continually been used by investment firms, mutual funds, and portfolio managers.

As O'Shaughnessy found that December is the best month to rebalance a long term portfolio, I have adapted these strategies for use as a starting point for finding potential growth and value in the coming year.

Beginning with value stocks, below are ten dividend stocks worth considering for your 2013 portfolio. (A full list of the screen results, including 100 dividend stocks and 100 growth stocks, can be found here.)

The Cornerstone Value strategy includes stocks with the following fundamental parameters:

  1. Market cap > Market mean
  2. Shares outstanding > Market mean
  3. Sales (TTM) > 1.5 times the market mean
  4. Cash flow per share > Market mean
  5. Exclude Utilities stocks
  6. Rank by highest dividend yield

1. NTI: Northern Tier Energy LP

  1. $2.1 Billion market cap
  2. 38.01% Dividend yield
  3. 9.59% Return on sales
  4. 6.38% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

2. XRS: TAL Education Group

  1. $697.3 Million market cap
  2. 22.22% Dividend yield
  3. 14.28% Return on sales
  4. 1.32% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

3. CYS: CYS Investments Inc

  1. $2.2 Billion market cap
  2. 14.07% Dividend yield
  3. 166.00% Return on sales
  4. 0.47% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

4. NMM: Navios Maritime Partners L.P.

  1. $821.3 Million market cap
  2. 13.22% Dividend yield
  3. 36.64% Return on sales
  4. 0.05% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

5. EFC: Ellington Financial LLC

  1. $457.3 Million market cap
  2. 12.57% Dividend yield
  3. 118.00% Return on sales
  4. 4.11% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

6. MITT: AG Mortgage Investment Trust Inc

  1. $569.6 Million market cap
  2. 12.51% Dividend yield
  3. 127.00% Return on sales
  4. 0.95% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

7. HCLP: Hi-Crush Partners LP

  1. $421.2 Million market cap
  2. 12.31% Dividend yield
  3. 55.85% Return on sales
  4. 0.47% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

8. IRS: IRSA Investments and Representations Inc.

  1. $410.9 Million market cap
  2. 12.10% Dividend yield
  3. 17.87% Return on sales
  4. 0.32% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

9. NRP: Natural Resource Partners LP

  1. $2.0 Billion market cap
  2. 11.81% Dividend yield
  3. 37.11% Return on sales
  4. 13.24% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

10. PSEC: Prospect Capital Corporation

  1. $2.2 Billion market cap
  2. 11.59% Dividend yield
  3. 55.31% Return on sales
  4. 0.10% Cash flow growth rate (TTM vs. prior TTM)

(click to enlarge)

Source: Your 2013 Portfolio: 10 High-Yielding Dividend Stocks, Part I