| |
 |
 |
|
|
Tip Sheet Archive
Overview
High Dividend Yield
High Yield DJIA30
High Yield TSX60
Dividends at Risk
Dividend Risk DJIA30
Dividend Risk TSX60
Value Ratio Approach
Value Ratio DJIA30
Value Ratio TSX60
Graham's Approach
Graham DJIA30
Graham TSX60
Other Screens
Low P/E DJIA
Low P/E TSX60
Low P/B DJIA
Low P/B TSX60
Low P/S DJIA
|
Stingy Investor Tip Sheet
| ||||
| Graham Net Net Update | ||||
I've refreshed the list of Canadian and U.S. Net Net stocks due to popular demand. These are stocks trading at a discount to current assets less all liabilities. Ben Graham originally suggested stocks trading at 66% of their Net Net value. I was a little more generous and started my search at 70% or less of Net Net. (Net Net = current assets less all liabilities). It should come as no surprise that there are relatively few Net Net candidates and they tend to be very small stocks indeed. Currently, there are about 670 candidates world-wide according to Bloomberg. But data on these very small stocks tends to be uneven at best. Indeed, looking for Net Nets can be a good way to uncover database errors or bankrupt companies. Nonetheless, you can occasionally spot a gem or two. But, before diving in, make sure you go the extra mile to check the data and beware that many of these stocks are extraordinarily illiquid. In such cases, market orders can lead to poverty. Buying stocks indiscriminately from a Net Net list can be dangerous. If it's dangerous, why bother? Because the returns have been quite good as Montier showed in his article "Graham's net-nets: outdated or outstanding?" which can be found in his book "Value Investing". (Hint: The answer is outstanding.) You just have to sort through the dross. The two tables below present raw data. To help discriminate between the bankrupt companies and those that are not quite dead yet, I've sorted them by Market Capitalization from high to low. It's not perfect but broken companies usually appear lower down on the list. Also, for NASDAQ stocks, a trailing Q in a 5 letter ticker symbol is a bad sign. Here are, the surprisingly long, lists of Canadian and U.S. stocks that pass the Net Net test ... If you're a current subscriber, login to see the tables. If not, subscribe today! | ||||
| ||||
| 08/17/2010 9:00 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Stingy Stock Update | ||||
Our Stingy Stock method is very popular and, we're pleased to say, that it has also been highly profitable. Just take a look at the results thus far for the 2010 crop of stocks. After the huge run, it won't surprise you that we've had several requests for updates from keen investors. But before revealing the current (interim) list of Stingy Stocks, let's take a quick look at some of the criteria we used to find them.
You can learn even more about the approach by perusing last fall's article. The rest of this update has been reserved for Rothery Report subscribers. If you're a current subscriber, just login to discover interesting value stocks. If not, subscribe today! | ||||
| ||||
| 08/03/2010 11:30 AM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Patient ETF | ||||
Vito Maida runs Patient Capital Management which is a conservative value-oriented investment counsel firm based in Toronto. His most recent quarterly letter indicates that he appears to be less than bullish ... "However, these bailouts will not be without consequences; sovereign global debt will rise, currencies will devalue and trade wars are likely to erupt. As a result, global economic recovery will take longer and growth will be slower than expected. In addition, inflation and higher interest rates become an increasing risk. In the past, such conditions have not been positive for broad based equity indices. These serious economic problems combined with equity valuations pushing the upper limit of their historical range spell RISK to us." The high net worth portfolios that Patient Capital manages were about 35% in cash earlier this week. You might consider that a bearish stance. But Vito is well known for having even higher cash allocations. Particularly before the big crash in the late 2000s. He has also been a little shy about revealing the stocks that he holds in his portfolio. (That's not at all uncommon for investment counsel firms. After all, they're selling their investment expertise and are loathe to give it away for free.) However, Vito recently started managing the Horizons AlphaPro North American Value ETF (HAV). (The fund's mandate requires cash levels of at most 25% and at the end of April they were sitting at 22.4%.) HAV lets investors peak in on Vito's picks. At the end of April 2010, the ETF's top 10 stock holdings accounted for 50.9% of the portfolio and were ... 1 CBS CORP 5.68% 2 LOWES 5.61% 3 GENERAL DYNAMICS 5.15% 4 US BANCORP 5.11% 5 BCE INC 5.08% 6 CINTAS 5.00% 7 STRYKER 4.96% 8 DIAGEO PLC ADR 4.84% 9 HEWLETT PACKARD 4.84% 10 JOHNSON & JOHNSON 4.63% With stocks sagging, it's time to buff up your watch list of quality companies. That way, you might be able to snag a few should they fall well into bargain territory. Vito's list is a good place to start. | ||||
| ||||
| 05/20/2010 11:00 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Value in the S&P500 | ||||
This is a Rothery Report feature. If you're a current subscriber, login to discover interesting value stocks. If not, subscribe today! | ||||
| ||||
| 05/19/2010 10:00 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Graham Net Net Update | ||||
I've refreshed the list of Canadian and U.S. Net Net stocks due to popular demand. These are stocks trading at a discount to current assets less all liabilities. Ben Graham originally suggested stocks trading at 66% of their Net Net value. I was a little more generous and started my search at 70% or less of Net Net. (Net Net = current assets less all liabilities). It should come as no surprise that there are relatively few Net Net candidates and they tend to be very small stocks indeed. Currently, there are about 600 candidates world-wide according to Bloomberg. But data on these very small stocks tends to be uneven at best. Indeed, looking for Net Nets can be a good way to uncover database errors or bankrupt companies. Nonetheless, you can occasionally spot a gem or two. But, before diving in, make sure you go the extra mile to check the data and beware that many of these stocks are extraordinarily illiquid. In such cases, market orders can lead to poverty. Buying stocks indiscriminately from a Net Net list can be dangerous. If it's dangerous, why bother? Because the returns have been quite good as Montier showed in his article "Graham's net-nets: outdated or outstanding?" which can be found in his book "Value Investing". (Hint: The answer is outstanding.) You just have to sort through the dross. The two tables below present raw data. To help discriminate between the bankrupt companies and those that are not quite dead yet, I've sorted them by Market Capitalization from high to low. It's not perfect but broken companies usually appear lower down on the list. Also, for NASDAQ stocks, a trailing Q in a 5 letter ticker symbol is a bad sign. Here are, the surprisingly long, lists of Canadian and U.S. stocks that pass the Net Net test ... If you're a current subscriber, login to see the tables. If not, subscribe today! | ||||
| ||||
| 05/17/2010 4:00 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Meeting Notes | ||||
The Inoculated Investor has a series of handy notes from the Berkshire, Markel, Wesco and VIC meetings ... Berkshire Hathaway 2010 Annual Meeting Notes Markel Annual Meeting 2010 2010 Wesco Annual Meeting Notes 2010 Value Investing Congress Notes | ||||
| ||||
| 05/11/2010 5:45 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Inefficient markets | ||||
There were a few zany trades today ... P&G: Sorry, My Bad Accenture for a cent Philip Morris International for $2 Glitches send Dow on wild ride Nasdaq to Cancel All Trades of Stocks Moving More Than 60% | ||||
| ||||
| 05/06/2010 7:30 PM EST Permlink save & share | Markets | |||
| ||||
| ||||
| Value Destruction | ||||
Biglari Holdings's (BH) Biglari wasn't content with slapping his name on a company he recently gained control of. No siree. He also moved to line his pockets with a big performance fee . . . "The Incentive Bonus Agreement provides Mr. Biglari the opportunity to receive annual incentive compensation payments based on the Company's book value growth for each fiscal year. If the Company exceeds a 5% annual book value growth hurdle, Mr. Biglari would receive an incentive compensation payment equal to 25% of the Company's book value in excess of that hurdle." But it turns out that investors aren't nearly as keen and have been dumping shares this week after the fee was announced last Friday ...  (BH Chart) Just after midday, the stock had declined more than 25% from its recent 52-week high. Nothing like a 25% fee to inspire a quick 25% loss. Forget the performance fee, a performance penalty seems to be in order... | ||||
| ||||
| 05/05/2010 11:10 PM EST Permlink save & share | Fees | |||
| ||||
| ||||
| Charlie on the crisis | ||||
| ||||
| 02/12/2010 11:30 PM EST Permlink save & share | Markets | |||
| ||||
| ||||
| Crony Capitalism | ||||
Part 2 Part 3 Part 4 Part 5 Part 6 | ||||
| ||||
| 02/09/2010 7:00 PM EST Permlink save & share | Government | |||
| ||||
| ||||
| Graham Net Nets | ||||
Last week I was sifting through Net Net stocks. These are stocks trading at a discount to current assets less all liabilities. Ben Graham originally suggested stocks trading at 66% of their Net Net value. I was a little more generous and started my search at 70% or less of Net Net. (Net Net = current assets less all liabilities). It should come as no surprise that there are relatively few Net Net candidates and they tend to be very small stocks indeed. But as I mentioned to Ian, Graham's value stocks do exist. Currently, there are about 700 candidates world-wide according to Bloomberg. But data on these very small stocks tends to be uneven at best. Indeed, looking for Net Nets can be a good way to uncover database errors and bankrupt companies. Nonetheless, you can occasionally spot a gem or two. But, before diving in, make sure you go the extra mile to check the data and beware that many of these stocks are extraordinarily illiquid. In such cases, market orders can lead to poverty. Buying stocks indiscriminately from a Net Net list can be dangerous. If it's dangerous, why bother? Because the returns have been quite good as Montier showed in his article "Graham's net-nets: outdated or outstanding?" which is in his book "Value Investing". (Hint: The answer is outstanding.) You just have to sort through the dross. The two tables below present raw data. To help discriminate between the bankrupt companies and those that are not quite dead yet, I've sorted them by Market Capitalization from high to low. It's not perfect but broken companies usually appear lower down on the list. Also, for NASDAQ stocks, a trailing Q in a 5 letter ticker symbol is a bad sign. Here are, the surprisingly long, lists of Canadian and U.S. stocks that pass the Net Net test ... If you're a current subscriber, login to see the tables. If not, subscribe today! | ||||
| ||||
| 02/08/2010 7:30 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| Vito Maida Interview | ||||
| ||||
| 02/08/2010 12:01 AM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| 4 horsemen of apocalyptic returns | ||||
Jason Zweig's article in last weekend's WSJ chastised investors for their overly optimistic return expectations. Problem is, it seems to me, that even Zweig's low expectations may well be wildly optimistic. But let's start with what got Jason all worked up. Evidently, "A nationwide survey last year found that investors expect the U.S. stock market to return an annual average of 13.7% over the next 10 years." Those are some mighty high expectations. But you never know. There's a small chance that a nice little bubble, or two, might get us there. Anyway, Jason then tried to estimate "net net net" returns. (Not to be confused with Benjamin Graham's "Net Net" stocks.) Jason's "net net net" returns are returns after fees, taxes, and inflation. Jason asked a few notable investors for their "net net net" return estimates. William Bernstein was the optimist at 4%, Laurence Siegel said 3%, John C. Bogle was keen on 2.5%, and Elroy Dimson was the pessimist at 0.5%. But the makeup of the portfolios in question wasn't clear. These estimates appear to be based on diversified stock and bond portfolios. Nonetheless, these estimates seem high to me even for all stock portfolios. At least when it comes to the average investor. That's because the experts have likely assumed that investors will minimize fees and taxes (to the extent possible). But instead of making projections, I like to look at historical returns and then factor in the 4 horsemen of the return apocalypse. I start with the annual returns for Canadian stocks as represented by the S&P/TSX Composite. I then factor in poor timing, fund fees, taxes, and inflation. I assume that poor timing reduces returns by 3 percentage points a year which may be on the conservative side. Fund fees come in at 2.5% annually which is common for equity funds in Canada. I also assume that capital gains taxes of 23% are levied annually. It is very important to note that investors can work to reduce all of these costs. (Inflation, the last horseman, is harder to deal with.) How would an investor have fared when faced with such costs? The results are shown in the graphs below. Just be warned, they ain't pretty.  (click for larger version)  (click for larger version) The moral of the story is to try to reduce fees, taxes, and poor timing. Btw, real bears, like Eric Falkenstein, would add in a few more depressing factors. Be careful, it's a risky world out there. | ||||
| ||||
| 01/20/2010 11:30 PM EST Permlink save & share | Markets | |||
| ||||
| ||||
| Asset Mixer Update | ||||
We've just updated the popular Stingy Investor Asset Mixer and Periodic Table of Annual Returns for Canadians to include both nominal and real (or inflation-adjusted) returns for 2009. Nearly every asset class we follow was up in 2009. The emerging market index fared the best with gains of 54.5% but the good old S&P/TSX took second spot with an advance of 35.1%. The only laggard in 2009 was the U.S. bond index which got clipped by the surging Canadian dollar and fell 12.1%. A special thanks to Norbert Schlenker at Libra Investment Management for collecting the raw data. | ||||
| ||||
| 01/20/2010 9:30 PM EST Permlink save & share | Markets | |||
| ||||
| ||||
| Merry Christmas! | ||||
Here are a collection of links to help inspire a little Christmas cheer. Scroogie Goodness The classic Alastair Sim's Scrooge (B&W in 9 parts) 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 A Christmas Carol So, Scrooge was right after all What I like about Scrooge In defense of scrooge The Case for Ebeneezer A Few Christmas Songs A Little Weirdness From Al & Others Christmas At Ground Zero I want a Hippopotamus for Christmas | ||||
| ||||
| 12/24/2009 11:30 AM EST Permlink save & share | Christmas | |||
| ||||
| ||||
| Montier on Value Investing | ||||
I've been thoroughly enjoying James Montier's new book Value Investing: Tools and Techniques for Intelligent Investment (ISBN-10: 0470683597). I heartily recommend it to value investors. The book is a collection of Montier's recent articles and it thankfully avoids becoming highly repetitive. More importantly, several of the articles (on their own) are worth the modest price of admission. So, pick up a copy. You can get a taste of the great content by reading some of the articles which I've found on the web. Six Impossible Things Before Breakfast CAPM is CRAP, or, The Dead Parrot lives! Clear and present danger: the trinity of risk The psychology of bear markets The road to revulsion and the creation of value Sucker's rally or the birth of a bull? | ||||
| ||||
| 12/17/2009 8:00 PM EST Permlink save & share | Value Investing | |||
| ||||
| ||||
| About Legal | Contact Us |