Seeking Alpha
View as an RSS Feed

Scott Martindale  

View Scott Martindale's Comments BY TICKER:
Latest  |  Highest rated
  • Bulls Close Out Another Solid Year With Expectation Of Further Gains But Higher Volatility In 2015 [View article]
    We will not be posting the list to the public for a while. However, the stock list will be revealed when the UIT launches on 1/14. You can buy the full report with our selection rationale at http://bit.ly/17fNR1Q, or you can visit the First Trust web site to view the fact card for the UIT.
    Jan 6, 2015. 10:45 AM | Likes Like |Link to Comment
  • Stock Investors Make Up New Rules For Their New Market Paradigm [View article]
    Thanks for all your great comments, insights, and questions. I truly appreciate the courteous interactions, including phrases like, "I stand corrected," "No problem," and "You are welcome," which has become so rare in today's anonymous online discussions. Thank you for that. Let me just add regarding the question about Vanguard ETFs, they are indeed in our rankings of 524 equity ETFs, but they don't score particularly highly compared to the others I mention instead. Our rankings are based purely on aggregation of the fundamentals-based Outlook scores for the underlying stocks, without regard to trading volume, or expense ratios, or other important characteristics to ETF selection.
    Nov 20, 2014. 02:45 PM | Likes Like |Link to Comment
  • Bulls Rule As Volatility Recedes And Investors Position For Holiday Cheer [View article]
    You are right in that there already has been gridlock with the Republicans controlling the House. And now that they also control the Senate, the President might be using his veto pen more often. The general theory about the benefits of gridlock are twofold: 1) Fewer bills get passed. New laws and regulations often have the negative impact of putting constraints on business, the economy, and/or individual initiative -- so, fewer bills mean fewer constraints on growth. 2) Businesses hate uncertainty and often withhold new capital investment because of it. The threat of new laws creates uncertainty -- so gridlock can relieve such worry about hiring and making long-term capital investment in things that might become constrained or limited at some point. Of course, these points are debatable, and not all new laws place undue constraints on the economy, but on balance that's the general theory about the benefits of gridlock.
    Nov 11, 2014. 02:44 PM | Likes Like |Link to Comment
  • Bulls Rule As Volatility Recedes And Investors Position For Holiday Cheer [View article]
    For now, the Fed will continue to reinvest the proceeds of maturing securities. It likely won’t start shrinking the balance sheet until after it starts raising the short-term Fed Funds Rate, which is not expected to happen until mid-2015 at the soonest. So, yes, this will still have a "QE impact" on the market, at least until it begins the tightening process. But even then, there is no hard-and-fast timetable on how quickly the balance sheet must be unwound, and the Fed might choose to slowdown or even reverse its tightening if it perceives a detrimental impact on the economy. Here is one article on the topic:
    http://buswk.co/1xfygdk
    Nov 11, 2014. 02:31 PM | 1 Like Like |Link to Comment
  • August Consolidation Offers Opportunity To Buy Best Stocks From Top Sectors [View article]
    Rob, my weekly article appears on several sites, including Sabrient blog, Seeking Alpha, Investing.com, and others, and it goes out as an email newsletter to subscribers who have signed up for it, so I don't regularly monitor comments on all sites. Best bet for getting a timely response from us is to submit questions through our web site. Keep in mind, the purpose of my weekly article is not to provide a report card on Sabrient's various portfolios, but to offer up trading ideas to the general investing public, and that means describing what's working rather than what's not working.

    But to be absolutely clear, we do not own a crystal ball and occasionally some of our stock selections do not perform well, as you pointed out (like TX and MRVL). And some perform great for us for a long while, but then later have a hiccup that changes everything (like OCN).

    We certainly appreciate that you are pulling for us. Our core approach employs a GARP (growth at a reasonable price) quantitative model to generate a short list of stocks from the broader universe, followed by a qualitative fundamental review process, and finalized with a qualitative forensic accounting (earnings quality and insider behavior) review by our subsidiary Gradient to throw out the higher-risk names that might not be evident in the quant data. The model employs no momentum factors or timing triggers. Our annual Baker's Dozen (top picks list) has finished well ahead of the overall market each year over the past five years since we launched it in Jan 2009. It tripled the SP500 return in 2012 and doubled it in 2013, and the first series of our Forward Looking Value (launched in June 2013) also doubled the SPY over the ensuing 12 months. Moreover, of the 44 total positions between those two portfolios last year, only 3 were negative after 12 months. As I write this on Wed Aug 13, our 2014 Baker's Dozen is up +9.9% while the SPY is up +7.7% over the same 7-month timeframe (Jan 13 launch), so it's doing okay.

    The Weak Treasury portfolios employ a different selection approach that is focused on outperformance during rising interest rates and steepening yield curve (for those who seek to position themselves for such a climate taking hold as the Fed tapers their market manipulation), but in fact the climate has been the exact opposite, as the 10-year Treasury continues to strengthen (interest rates falling) and inflation remains low. If you are a regular reader of my weekly article, you know that I have been in the camp that has expected long-term rates to remain low as global forces push capital into the relative safety of U.S. Treasuries, despite Fed tapering. These Weak Treasury portfolios are heavily invested in Financial (about twice the exposure of the broader market), followed by Tech and Industrial. Although Tech has done well in the prevailing market, Financial and Industrial have not kept up, which is somewhat unusual historically during bullish market conditions. Thus the underperformance.

    However, our core GARP approach employed in our other portfolios has worked quite well for us and is what we consider to be a sustainable all-weather approach for the future. Of course, no alpha strategy outperforms its benchmark all the time in all market conditions, so some investors might prefer either a trend-following approach or simple passive investment in a broad market index.
    Aug 13, 2014. 05:12 PM | Likes Like |Link to Comment
  • Bold Bulls Dare Meek Bears To Take Another Crack [View article]
    Thanks for your comment. Regarding BIDU, it scores a mid-range 51 (out of 100) in our GARP rank and a 4 (out of 5) in our Earnings Quality Rank. Also, a low Value score of 2 (out of 100), but high Growth and Momentum scores of 99 and 80, respectively. So, it displays strong growth prospects, good earnings quality, and obvious momentum, but that momentum has led to perhaps an overly high valuation. As you suggest, technical consolidation, and preferably a little pullback to test support, would make a better entry point from my standpoint.
    Jul 30, 2014. 01:29 PM | Likes Like |Link to Comment
  • Sector Rankings Take A Bearish Turn As The Flight To Safety Solidifies [View article]
    Thanks for your continued support. The SectorCast model includes no technical indicators, but the sentiment indicators can be valuable for making short-term adjustments even though the longer-term outlook has been consistently bullish.

    Do you windsurf The Gorge?
    Apr 7, 2014. 02:30 PM | Likes Like |Link to Comment
  • SectorCast Rankings Take A Neutral Slant As Market Hits New Highs [View article]
    As it says in the disclosure at the top, I have no positions in any stocks mentioned.
    Mar 13, 2014. 09:39 AM | Likes Like |Link to Comment
  • SectorCast Rankings Take A Neutral Slant As Market Hits New Highs [View article]
    Strictly from the standpoint of Sabrient's unbiased rules-based quant models, QCOR carries a 79 Value score, a perfect 100 Growth score, and a 94 Momentum score, and it carries a Strong Buy rating from our ratings algorithm. Moreover, it resides in the highest (best, or lowest risk) quintile of our Earnings Quality Rank, and it ranks #17 out of over 2700 eligible stocks in the GARP model that serves as the foundation of our high-performing annual "Baker's Dozen" portfolio (which has a +100% total return over the past two years), boasting a strong composite score of 87.5 (out of 100). Also, from a technical perspective, the stock has pulled back to the uptrend line where it seems to be finding buyable support.
    Mar 12, 2014. 01:33 AM | Likes Like |Link to Comment
  • Stocks Continue Their Rebound As Uncertainties Subside [View article]
    The Sabrient Ratings Algorithm (SRA) has been around since 2003. The Earnings Quality Rank (EQR) has only been in production since January 2013, so it is not included in SRA. We intend to launch a project later this year to incorporate EQR into SRA.

    However, note that EQR is already a factor in the Outlook Rank, which is the key score in our SectorCast model.
    Feb 19, 2014. 10:00 AM | 1 Like Like |Link to Comment
  • Flight To Safety May Serve As Prelude To Flight To Quality Stocks [View article]
    I actually wrote and submitted this article on Sunday. SA didn't get it published until Tuesday, unfortunately. You can find more timely postings on the Sabrient blog.
    Feb 6, 2014. 09:40 AM | Likes Like |Link to Comment
  • Will Investors Embrace Weakness As An Entry Point? [View article]
    I have been writing these articles every week for several years, so I would encourage you to look back through my articles to see the various sector scores on various dates. You will see that at times, top-bottom spreads in Bull and/or Bear scores were much wider, sometimes ranging from 70's to 30's.The tighter scores we have been seeing are reflective of high equity correlations. Thanks for reading!
    Feb 1, 2014. 12:06 PM | Likes Like |Link to Comment
  • Fed Drops The Green Flag And Bulls Are Off To The Races [View article]
    Thanks for your interest in the Baker's Dozen. You probably noticed the big 3% jump today (Thursday) in the portfolio, led by 15% gain in IACI, despite the market being flat to down.

    In prior years, the portfolio has stayed somewhat under the radar, with a relatively small contingent of subscribers, although each year the strong performance has attracted more and more attention, of course. Keep in mind that in order to be included in the unit investment trust (UIT) that tracks the portfolio, each stock must display a history of sufficient daily trading volume such that impacts like this are minimized. The UIT has a 30-day sales period, so funds are invested over time rather than all at once.

    You won't find micro caps in the portfolio. The smallest firm in the current portfolio upon launch on Jan 11 was EPL at about $900M mkt cap, and you can see in the historical chart that there were no notable price spikes in EPL around launch. All the other stocks were considered mid or large caps. More importantly, we aim for a minimum daily dollar volume (P*Vol) of at least $5M/day.
    Dec 19, 2013. 01:29 PM | Likes Like |Link to Comment
  • Tech Stays Strong As Markets Present A Welcome Entry Point [View article]
    Follow up note: I wrote this article on Wed night when SNPS was down afterhours, but it recovered quickly on Thu despite troubling earnings quality trends. However, another recent Gradient Analytics report last month addressed earnings quality issues at ULTA, which is down big time (about 20% today) after disappointing last night.
    Dec 6, 2013. 09:55 AM | Likes Like |Link to Comment
  • A Company That Has Been Lining The Pockets Of Its Shareholders For Years [View article]
    Thanks for sharing, Bill. I wanted to point out that Sabrient Systems' fundamentals-based quant models also have long favored OCN. We publish an annual "Baker's Dozen" portfolio of top stocks for the year, and OCN has been in the 13-stock portfolio both this year and last year. Last's year's portfolio was up +43% overall, with OCN contributing +135%, and this year's is up +31% so far since Jan 11 launch (with all 13 stocks solidly positive), with OCN contributing +52%.
    Sep 19, 2013. 05:13 PM | Likes Like |Link to Comment
COMMENTS STATS
99 Comments
49 Likes