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Scott Martindale

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  • Top 30 'Liquid' ETFs [View article]
    Mark, your premise that "puny volume" in an ETF translates into poor liquidity ("difficult to move in and out of") is in error. In fact, so long as the underlying constituents are highly liquid, the ETF is also highly liquid with virtually no discount/premium to NAV. There is a whole industry of Authorized Participants and Liquidity Providers set up to ensure just that -- so even if you want to sell an amount that is a multiple of the average daily volume, you will still get a price very close to the NAV of the underlying stocks.

    Also, I see that the bulk of your list comprises speculative gold, emerging markets, and leveraged ETFs, which most investors shy away from. I'd like to see a similar list of top performers among unleveraged ETFs holding diversified portfolios of U.S. stocks.

    For example, if you look at an ETF like NFO, which tracks (full disclosure: my firm) Sabrient's Insider Sentiment Index, it is a way to follow those who are closest to a given company -- corp officers and Wall Street analysts who follow the firm. It holds 100 high-profile stocks reflecting positive sentiment and has an unleveraged YTD return of about 18%, which easily outperforms both the cap-weighted SPY and the equal-weighted RSP, and a 4-STAR Morningstar rating. Although it has relatively low daily volume (approx 25,000 shares), the bid/ask spread is only a couple of pennies with very low variance from NAV.
    Nov 30, 2010. 12:20 PM | 1 Like Like |Link to Comment
  • Hedge Fund Maverick Capital Has Its Highest Tech Exposure Ever [View article]
    Sabrient's fundamentals-based quant algorithm has been rating the Technology iShare IYW near the top of the U.S. sector rankings for awhile now, along with Healthcare IYH. Also, our models have recently put Buy ratings back on MSFT, INTC, and APOL on good valuations. On the other hand, CTV was just downgraded from Buy to Hold after its big price spike.
    Oct 29, 2010. 02:47 PM | 1 Like Like |Link to Comment
  • 5 ETFs to Play the Coming Wind Energy Revolution [View article]
    Sabrient's SectorCast ETF quantitative rankings employs a bottom-up composite profile of the underlying stocks to score and rate the ETF. PBW is the only one on the list that we currently rank, and it gets a score of 74 (out of 100) and an Attractive rating. It is particularly strong in long-term projected growth and analyst's recent upward earnings revisions. (Note that it was just downgraded this week from Very Attractive on valuation, as its score dropped from last week's 82.)
    Oct 13, 2010. 04:16 PM | 1 Like Like |Link to Comment
  • As Coal Heats Up, 3 Companies With Persuasive Coal Stories [View article]
    Sabrient's quantitative ratings algorithm gives high marks to PUDA, ARLP, and JOYG in the coal space. Also scoring pretty well are PVG, AHGP, and JRCC. PUDA and JRCC have lagged in the recent rally, and so they sport the highest Value Scores -- particularly PUDA, which scores a 92 and carries a Strong Buy rating. (Disclosure: I hold PUDA in an IRA.)
    Oct 2, 2010. 07:18 PM | Likes Like |Link to Comment
  • Sector Detector: Is That a Glimmer of Optimism? [View article]
    Steve, we will post more information on our web site about SectorCast shortly. In a nutshell, we aren't looking at macro variables or doing top-down analysis. Sabrient's SectorCast model builds a composite profile of a given sector, industry, index, or ETF (or other basket of stocks) based on bottom-up scoring and appropriate weighting of the constituent stocks. The model employs a fundamentals-based multi-factor approach considering forward valuation, earnings growth prospects, Wall Street analysts’ consensus revisions, accounting practices, and various return ratios.

    Of course, any given basket of stocks will score differently depending upon which names are included and the weighting scheme (e.g., market cap, fundamental, equal, etc., which can change greatly between index rebalances).
    Sep 30, 2010. 05:17 PM | Likes Like |Link to Comment
  • The Problem With ETFs: Indexing's Central Paradox [View article]
    I totally agree when you say, "The real advantage of that they allow ordinary investors to efficiently allocate assets between markets...or even to own a version of the market more to their liking, such as with fundamentally-weighted ETFs."

    At Sabrient, we not only produce relative rankings of equity ETFs based on a quantitative, bottom-up, appropriately-weighted composite scoring of the given ETF's holdings, but we also build quant indexes that reflect an algorithm that seeks to layer alpha generation on top of the intended beta exposure -- either by identifying a subset of equally-weighted "best of breed" securities or through a quant-score-weighting of the given universe or sector (as opposed to market-cap or fundamental weighting).

    Great article.
    Sep 17, 2010. 02:43 PM | Likes Like |Link to Comment
  • Where to Next? Technical Analysis of the SPY Chart [View article]
    I wrote this article and posted to the Sabrient blog late Sunday night 8/29. Since then, the bear flag confirmed with the breakdown on Mon 8/30 into this morning (Tue 8/31). (I sold my TZA position too early yesterday!). Today, the market is struggling to hold at recent support in the SPY 105 range--and perhaps getting some end-of-month support, as well. My personal bias is for further weakness into September, with a test of support at the early-July lows around 102-102.50 (as suggested by the H&S pattern).
    Aug 31, 2010. 01:01 PM | Likes Like |Link to Comment
  • ATP Oil & Gas Plunges on Q2 Earnings: The Market Doesn't Get It [View article]
    Sabrient's fundamentals-based quantitative ratings algorithm gives ATPG a Strong Sell rating, with a Value score of 39 and a Composite Score (across Value, Growth, Momentum, Earnings, Balance Sheet, Group Strength) of 12 (out of 100). Also, I see that Audit Integrity gives it a Very Aggressive rating (the worst) for forensic accounting & corp governance.
    Aug 11, 2010. 01:06 PM | 8 Likes Like |Link to Comment
  • Skechers: Shape Up Your Portfolio [View article]
    Sabrient's fundamentals-based quantitative models like SKX a lot. The Sabrient Ratings Algorithm gives it a Strong Buy rating since mid-July, and it scores a 99 out of 100 in the forward-looking Company Outlook Score, an 89 Growth Score, and an 84 in the Operational Quality Trend Score. In fact, we just added it today to our Investor's (H)Edge long/short portfolio.
    Aug 2, 2010. 01:13 PM | 1 Like Like |Link to Comment
  • Homebuilder ETFs: Going Behind the Numbers [View article]
    Sabrient's SectorCast-ETF model, which builds quantitative bottom-up composite profiles of ETFs based on their constituent stocks, debuted on Fidelity's newly launched ETF Center last week. XHB scores a 69 out of 100 in its forward-looking Outlook Score and garners an Attractive rating, while ITB scores a 59 in its Outlook Score and gets a Neutral rating.
    Jul 29, 2010. 10:49 AM | Likes Like |Link to Comment
  • ETF Strategies for Recession-Proofing Your Portfolio [View article]
    Actually, a long/short approach can be effective in all market conditions, not just when you feel it's time to hedge against a recession. Employ a proven model that identifies the highest quality stocks or ETFs to trade long and the lowest quality stocks to trade short, and seek to capture the performance spread. You can also use put options if you prefer not to short stocks or ETFs, and buying inverse ETFs on the weaker sectors works well, too.
    Jul 27, 2010. 10:05 AM | 4 Likes Like |Link to Comment
  • Why Now's the Time to Buy Google [View article]
    GOOG is a Strong Buy in the Sabrient Ratings Algorithm, a fundamentals-based quantitative stock evaluation system. Although its Value Score is average, GOOG is powered by its Growth Score of 94 (out of 100). The Growth Score is a composite of 5 multi-factor filters that are regularly backtested for predictiveness. Notably, GOOG's Growth Score is driven mainly by the 3 multi-factor filters that have been backtesting the strongest, scoring a 99, 96, and 97 on those three sub-filters, which measure consistency in historical EPS performance, the trend in EPS growth, and projected earnings growth.
    Jul 19, 2010. 01:09 PM | Likes Like |Link to Comment
  • Seven ETFs Offering Good Value [View article]
    Sabrient's SectorCast-ETF model ranks all equity ETFs with a bottom-up fundamentals-based quant model. It is essentially an aggregate forward-looking quality evaluation of the given basket of stocks. Highest ranked among the ETFs you list here is XLV, followed by VTV. The most aggressive play for up markets is VO, and the most defensive for down markets is XLV. Top ranked in our list right now from an overall quality standpoint is SMH, as semiconductor stocks in general look strong going forward. From a pure valuation standpoint, also take a look at KIE (Insurance).
    Jul 7, 2010. 10:12 AM | Likes Like |Link to Comment
  • Integrated Oil Companies as the Best Energy Investment - Phil Weiss [View article]
    I'll chime in with Sabrient's quantitative ratings on the stocks mentioned. Favorites rated Strong Buy are HES (Value score of 95 out of 100), BP (Value score of 97), and MRO (Value score of 92). We also have Buy ratings on COP, RIG, XOM, and CVX. All of these stock ratings are driven by their high Value scores rather than Growth.
    Jun 9, 2010. 11:51 AM | Likes Like |Link to Comment
  • Is It Time to Buy Natural Gas Stocks? [View article]
    Let me share Sabrient's fundamentals-based quantitative scoring for these stocks. APA is rated the highest of the three, but only carries a Hold rating with a Value score of 83 (out of 100), a Growth score of 29, and a forward-looking fundamental Outlook score of 65 (mediocre). EOG is rated Sell with a Value score of 17, a Growth score of 9, and an Outlook score of 6. RRC is rated Strong Sell, with a Value score of 8, a Growth score of 59, and an Outlook score of 3. Overall, our quant models really don't like any of these stocks very much. Prefer XEC, PXD, UPL, NE.
    Jun 8, 2010. 03:52 PM | Likes Like |Link to Comment