In Friday's article we provided an update of the performance of our annual HOT STOCK LIST:
We also provided an update of the performance of the Toreador Large Cap Fund, TORLX which uses AFG’s Economic Margin Framework as part of its investment philosophy.
As you may note, both have done very well.
Today we decided to provide a Buy/Sell list to VE’s registered visitors applying some of these same investment principles: Economic Margin, Management Quality, and a company's Percent to Target (the deviation between a stock's current trading price and its current default target price according to AFG).
Below is a preview of the list which includes a Buy/Sell Recommendation on each Stock. The complete list, accessible to Value Expectations registered users, contains around 500 Stocks.
|S&P 500 Rank (Preview) - August 11th 2009|
|DRI||DARDEN RESTAURANTS||32.61||Strong Buy|
|KR||KROGER CO THE||20.93||Strong Buy|
|WLP||WELLPOINT INC||51.9||Strong Buy|
|AMT||AMERICAN TOWER CORP||32.37||Neutral|
|IRM||IRON MOUNTAIN INC||28.85||Neutral|
|NOV||NATIONAL OILWELL VARCO||37.1||Neutral|
|BEN||FRANKLIN RESOURCES INC||92.13||Sell|
|EXPD||EXPEDITORS INTL WASH INC||33.04||Sell|
|JDSU||JDS UNIPHASE CORP||5.93||Strong Sell|
|MWW||MONSTER WORLDWIDE INC||14.9||Strong Sell|
|NYT||NEW YORK TIMES||8.1||Strong Sell|
Source: The Applied FInance Group
A brief description of AFG's buy criteria variables:
AFG's Valuation Metric – Measures the percent to target (deviation between a stock’s current trading price and its AFG current default target price). To derive the intrinsic value of a firm, AFG uses its proprietary Valuation Model (modified discounted cash flow model).
Economic Margin - A corporate performance measurement that addresses the gaps in GAAP, eliminating distortions caused by accounting policies to measure what a company is truly earning above or below their cost of capital.
Management Quality – Assesses management’s ability to make wealth creating decisions.
AFG's Value Universe - Companies in the AFG universe, which have MV/IC at the bottom 50% of the universe and have EPS estimates.