Equities Lab

Deep value, growth, quantitative investing, long/short equity
Equities Lab
Deep value, growth, quantitative investing, long/short equity
Contributor since: 2013
Company: Equities Lab
I liked the article -- a new way to look at the data. I'd love to see how this varies over time -- do these distributions change, or not? Also, it give me the feeling that the 15% of filers who make most of the money are the tail that tends to wag the dog....
This article is amazing -- how did you get to know the Mexican poultry market so well? This looks like it has many hours of painstaking work in it...
I don't think Morningstar is at fault for this one -- we get -2.96 for the Baneish score in our copy of IBM's data. When we chart it, we see that it never got below -3.1, nor above -2.5 since 1996. We've wrestled with enough data errors in our system that I have sympathy for the GuruFocus developers -- there's just too much to get it all right all the time. I also know that the errors aren't pervasive enough to make the screens not work. Low Baneish stock trounce high Baneish ones. Stocks sporting an M score greater than -2 (rebalancing quarterly, from 1996) only get 4.21% annually, while stocks with an M score < -4 (again, rebalancing quarterly, from 1996) get 13.9% annually. I can pull these results into an article, if you want more....
I don't think Morningstar is at fault for this one -- we get -2.96 for the Baneish score in our copy of IBM's data. When we chart it, we see that it never got below -3.1, nor above -2.5 since 1996. We've wrestled with enough data errors in our system that I have sympathy for the GuruFocus developers -- there's just too much to get it all right all the time. I also know that the errors aren't pervasive enough to make the screens not work. Low Baneish stock trounce high Baneish ones. Stocks sporting an M score greater than -2 (rebalancing quarterly, from 1996) only get 4.21% annually, while stocks with an M score < -4 (again, rebalancing quarterly, from 1996) get 13.9% annually. I can pull these results into an article, if you want more....
I'm a little confused by your comment, but here goes:
1. When i say I'm looking for stocks that won't go down, I'm describing the risk profile I'm going for. If I wanted total return, a portfolio full of stocks that would either triple or go to zero would be fine, as the triples would wash out the zeroes. Not so for a covered call strategy, as the triples would be called away, and the zeroes would still hurt. On the other hand, a portfolio of stocks that went sideways with a sideways drift would be fine for a covered call strategy, since as long as the stocks didn't fall far enough to cancel the premium collected on the call, you profit on the premia. What's wrong with my logic here?
2. As for the buyer exercising the option, I'm talking about DURING the option's lifetime -- not at the end. Yes a broker will exercise an option automatically if it is going to expire in the money. But the stop loss applies throughout the span, not just at the end. Your broker can't exercise your option for you if it's in the money, or else you wouldn't be able to buy in-the-money options. Such forced early exercise means you lose the premium you paid for when you bought the option.
The people placing trades to further bubbles always lose, at the TOP of a bubble. These interest rates, being at 2 century lows, are a bubble. But are we at the top? Who knows. I don't like the risk vs reward, but I'm quite capable of being wrong. I've thought Apple was too expensive for years, now, and it keeps going up. I rant and rave more about it here http://bit.ly/1BcHmFt if anyone is interested....
Does anyone have any insight on the lawsuit surrounding BCOR at the moment and how it could further affect the share price?
We did not perform a DCF analysis. The 25% was an educated guess. If you are interested in seeing the other recommended stocks along with stocks that pass other better performing strategies then you should consider signing up for a free trial here: http://bit.ly/19FSBNd
Good Question. Refer to this article: http://seekingalpha.co...
And you can also sign up for a free trial to always have the updated list:
http://bit.ly/1iGa5i4
The management team seems to be on point.
wow thanks for sharing
She's off to the races
great Thanks. I'll check it out.
I'm not convinced the real estate market has peaked as there is not much data that supports that. In fact, most of the data supports the opposite.
SupFly - Great Trade.
All- Thanks for reading and commenting
I can't see BX being worth any less than $35. The company is now profitable so the dividend should be much less erratic going forward.
They did go IPO at the worst possible time.
It's trading above their IPO price they have just issued a ton of shares from their IPO up until early 2013. Now that the company is turning a profit, they should rarely be issuing shares which is what we have seen for the past 12 months or so.
I think it is worth $40 today!
Thanks for reading and commenting.
Yes a PE of 30. Remember that likely bullish catalysts should be priced into a stock such as:
The announcement of new products that HIMX will supply for
GOOG purchasing an additional % in HIMXs display subsidiary
A likely dividend increase
Any future bullish news from Glass
etc...
The average PE of semiconductor companies with a market cap greater than $500 million and a PE less than 100 is 24. HIMX currently trades at a PE of 20 BUT its estimated 5 year growth rates ranks in the top 7% of stocks in the semiconductors industry.
Since HIMX is expected to grow at a fast rate over the next 5 years then it should be trading for at least a 30-35 PE in my opinion.
Thoughts?
Good point. And a PE of 21 would be below its industry average. Thanks for reading and commenting.
Earnings growth > 40% seems typical when dealing with expensive (P/S > 9) stocks. Although explosive growth seems to lead to some outperformance (annual return 10% rather than 6% since 2003), this outperformance disappears when you facter in a P/S > 9. When both are true, the stocks (ex financials, biotech, mining, and etfs) seems to merely track the market....
Actually I wouldn't use P/S (price per sales) > 10 as a reason to short blindly -- the story with those stocks is quite mixed. I limited my research to P/S > 10, Market Cap > 1B, and not financial, real estate, ETF's, metals mining, or biotechnology. In that group (which did include FB, TRIP, etc), the story was as follows:
If the stock had gone up more than 10% in the last month -- short freely! The aggregate portfolio of those rebalanced weekly went from $100,000 in 2003 to $40,000 today, for an annualized "gain" of -9.03% (I didn't include trading or borrowing costs)
If the stock had gone up, but less than 10%, then don't buy, as they got crushed in 2008, but don't short. They outperform too often for that.
if the stock has gone down, but less than 10%, then you outperform the small cap index by 1% annually, and the SPY by 2% annually, so shorting's right out. Buying remains dangerous since your portfolio could be used as an anvil in 2008.
And, finally, more than 10% down in the last month was choppy and bad, but the surge in 2013 rules out shorting.
Maybe it's just me -- but when the comments start talking about the article writer being in cahoots with the "shorts" or working in their agency, that seems to be a bad sign for the stock price going forward. I wish we had the data to back it up, as I can with the price to sales > 10 assertion...
I went to a remolded Wendy's for lunch and was very impressed. The location looked beautiful, the employees seemed to be in high spirits, and the food was good.
What I noticed the most was the large blue collar crowd that you never see in a McDonalds.
I really like Wendy's as a company and investment.
This company has some of the worst fundamentals I have ever seen
Exactly thus making the threat of tax reform ever growing.
Nice post. We would love for you all to read and comment on our latest blog post on NTE: "Did I just Discover a Gold Mine in Nam Tai Electronics, Inc. (NTE)? "
http://bit.ly/PZwZ6u
Nice post. We would love for you all to read and comment on our latest blog post on NTE: "Did I just Discover a Gold Mine in Nam Tai Electronics, Inc. (NTE)? "
http://bit.ly/PZwZ6u
Yup, I would argue that the market extremely over-reacted to the single analyst miss. We would be in the $20 range if not for that. Regardless, looks like AFOP is in great shape.
Didn't see that coming as management stated they are "very conservative with their guidance." Pretty misleading.
Sorry for any misleading information. I still like the company's fundamentals and future growth prospects. We will see what happens with the call tomorrow.
Nice move today and nice article.
In terms on the Bank of America activity:
On 12/31/13 BofA was listed as the 3rd largest institutional holder in HIMX at 2.4 million shares. In January of 2014 they upgraded HIMX stating they are bullish on their LCOS division, the price increased and it created value for BofA. From there I would assume they took a lot of profits.
In March of 2014 they downgraded HIMX stating that they are bearish on HIMX's LCOS division... 9 hours before The Facebook deal was announced.
Obviously I am speculating, but it looks like the main driver of BofA's coverage on HIMX is creating profit taking and buying opportunities for itself...
I would imagine that they are heavily purchasing shares right now.
Thoughts?