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10 questions for John Dorfman
09/02/08 Permlink | Dorfman
"The Robot screen contains low P/E outliers. It calls our attention to some of the very cheapest stocks in the market, in the bottom percentile of price/earnings ratios. It screens out stocks that have excessive debt. From this screen we recently bought Om Group (OMG), the largest U.S. dealer in cobalt. It also deals in metal powers. The stock is selling for less than book value and less than six times earnings. We also bought some Cal-Maine Foods (CALM). It produces and sells eggs. Now that some of the crazier diet fads seem to be receding, I figure that eggs can rebound a little bit as part of a well-rounded diet for most Americans. The stock sells for 6 times earnings."



More articles on the same topic . . .

Pummeled stocks for contrarian investors
06/02/10 Permlink | Dorfman
"The rude market of the past month has knocked many stocks down to attractive levels. Investors who are brave -- and have a time horizon of one year or longer -- can find worthwhile bargains among them."

Ten stocks I wouldn't touch
01/27/10 Permlink | Dorfman
"These companies, in my judgment, have some of the worst balance sheets in the U.S. The first five companies mentioned above have negative net worth; that is, their liabilities exceed their assets. Among the 727 U.S. companies with a stock-market value of $3 billion or more, only 17 have that unfortunate distinction. The next five companies have positive net worth (stockholders' equity) but their total debt is at least five times equity, a trait shared by 26 of those 727 companies."

Hated stocks beat loved stocks
01/14/10 Permlink | Dorfman
"For 11 of the past 12 years, I have studied the performance of analysts. four favorite stocks, and the fate of the four they most scorned. My analysis covers 1998 through 2009, except for 2008, when I was temporarily retired as a columnist. Their favorites, on average, were flat during those years while the four stocks they hated most gained about 6 percent annually."

7 of 10 robot picks beat market
12/29/09 Permlink | Value Investing Dorfman
"If only robots could skip, click heels or cock their elbows like celebrating hockey players. Surely our robotic stock selection tool would be that animated after posting such a great year. Ten stocks a robotic or automated filtering technique helped us choose for 2009 would have turned a million dollars into $1.685 million, if we hadn.t used play money."

Ten growth stocks
12/26/09 Permlink | Dorfman
"A tool that has come in handy for me over the years is a stock screen that looks for growth at a low price. In more frivolous days, I used to call this paradigm the Bunny Portfolio."

Enjoy the January rebound
12/10/09 Permlink | Dorfman
"You wouldn't kick a man while he was down, would you? But the stock market would. Most years, investors put selling pressure in November and early December on stocks that have declined from January through October. Why? Blame the tax man."

Ride the recovery
12/03/09 Permlink | Dorfman
"In the early stages of economic recoveries, three stock-market sectors usually do well: energy, materials and industrials. In this column, I recommend a few stocks in these key groups."

Stocks Ben Graham might buy
11/10/09 Permlink | Graham Dorfman
"What I call Graham stocks have a share price that's less than book value (corporate net worth) and less than 12 times earnings, as well as debt less than 50 percent of stockholders' equity."

Dividend appeal
10/26/09 Permlink | Dividends Dorfman
"Dividends are as old-fashioned as corsets, if you listen to most investors. How wrong they are."

For once analysts are onto something
09/28/09 Permlink | Dorfman
"From 1998 through 2007, the four stocks rated highest by brokerage-house analysts at the beginning of the year dropped 1.7 percent, on average, in the ensuing 12 months. The four stocks they rated lowest gained 2.2 percent. Neither group beat the Standard & Poor's 500 Index, which had an average annual gain of 7.2 percent."

4 cheapskate stocks
08/25/09 Permlink | Dorfman
"I screened U.S. stocks with a market value of $500 million or more to find ones that are cheap by all of my favorite yardsticks. These stocks sell for less than 12 times earnings, less than one times book value (corporate net worth) and less than one times revenue. I also required that corporate debt be less than stockholders' equity. Of the more than three dozen stocks that passed the test, I recommend these four."

Homebuilders begin to appeal
08/18/09 Permlink | Dorfman
"Is it time to buy the homebuilders, which were market darlings in 2003 through 2005? The bullish case begins with the fact that the stocks had fallen so far. As a group, they plunged an astonishing 90 percent from July 20, 2005, through Nov. 21, 2008. That's comparable to the slide in Internet stocks in 2000- 2002. By some measures, the homebuilders had it worse. By the same token, homebuilding stocks are cheap. The question is whether they deserve to be."

Debt dogs of summer
07/29/09 Permlink | Dorfman
"Beware of the stocks leading the U.S. market higher this summer. Based on a sampling taken last week, I estimate that 90 percent of the top performers in the first three weeks of July were companies with debt greater than stockholders' equity. Less than one third of big, publicly traded U.S. companies carry such a heavy debt burden."

Amgen, Smucker, Steelcase have value
07/21/09 Permlink | Value Investing Dorfman
"A stock that is rising while most are falling may be worth a look. If that stock is also inexpensive and has a good balance sheet, it might be an opportunity."

Loving stocks the market left behind
07/07/09 Permlink | Value Investing Dorfman
"Last week, using Bloomberg stock-screening software, I combed through the 61 laggards. I eliminated 30 because their debt was greater than stockholders. equity. I chopped off another dozen because they sell for more than 15 times earnings. In a blasted market with lots of bargains, why pay so much? That left 19 stocks to consider. Here are four that I believe could make up for lost time and show significant appreciation in the next year."

Due for a comeback
06/01/09 Permlink | Buffett Dreman Miller Value Investing Funds Dorfman
"Some of the nation's best and most famous investors -- Warren Buffett, David Dreman, Ken Heebner and William Miller -- had hideous years in the bear market of 2008. I refuse to believe, though, that people with a long track record of investment prowess have suddenly become stock-market eunuchs."

Conoco, CBS, U.S. Steel are bargains
05/18/09 Permlink | Value Investing Dorfman
"Seven percent of all stocks sell for less than eight times earnings and also have total debt that I consider reasonably prudent (less than stockholders. equity). There are 171 stocks in this group. From among those 171, here are half a dozen that I think hold considerable investment interest now."

Duke, Allstate, Dow ace book-value test
04/19/09 Permlink | Value Investing Dorfman
"With a nasty recession raging, 20 percent of all U.S. stocks with a market value of $250 million or more are selling below book value. This group includes household names such as Duke Energy Corp., Allstate Corp., Dow Chemical Co. and Time Warner Inc."

Genuine values
03/23/09 Permlink | Value Investing Dorfman
"I think investors will see some dramatic recoveries by banks, brokerage houses and insurance companies over the next two to three years. Three financial stocks that I like (and own) are Berkshire Hathaway Inc., Cullen/Frost Bankers Inc. and Goldman Sachs Group Inc."

Debt is murder
03/16/09 Permlink | Dorfman
"Now, more than ever, is a good time to buy stock in companies with low debt. Even in normal times, I like companies with debt less than stockholders. equity -- preferably less than 50 percent of equity. Such companies have strategic flexibility: They can fund new projects, increase dividends, buy back stock or acquire troubled rivals. Companies with high debt, by contrast, lack the financial wherewithal to do most of those things. In addition, they must spend a lot of their time renegotiating interest rates and debt covenants with banks or bondholders."

Bank stocks are hated
03/02/09 Permlink | Dorfman
"For investors courageous enough to swim against the tide, now may be a good time to pick up bargains in the rubble of the banking industry. How can you tell which banks are on the safest footing?"

Glorification of smoothness
01/16/09 Permlink | Dorfman
"As Warren Buffett, one of the world's most successful investors, wrote in a 1996 report, 'I would much rather earn a lumpy 15 percent over time than a smooth 12 percent.' Some academics and investment practitioners place a great value on low standard deviation of returns. They reason that returns that don't vary greatly from one year to another are more likely to be replicated. The best returns, on a multiyear basis, come from investment managers who make bold decisions, and who often invest contrary to prevailing wisdom. People who follow these practices rarely have even, predictable annual results."

Prudential, Valero headline bum-market bargains
01/09/09 Permlink | Value Investing Dorfman
"It's an ill wind that blows nobody good. The drop in home prices helps first-time home buyers. And the slow-motion crash in the stock market is good for value investors if they are fortunate enough to have some cash on hand. As the year begins, there are more than seven dozen stocks that meet three stringent bargain-hunting criteria"

Robot portfolio stumbles
01/03/09 Permlink | Dorfman
""Well, even though historical profit figures will be a meaningless guide to performance during a recession, I had the robot select another 10 stocks to watch in 2009. Still in the list are Fairfax, methanol maker Methanex and contract energy driller Precision Drilling. Added are copper miner First Quantum Minerals Ltd., integrated energy company Petro-Canada, fertilizer make Agrium Inc., mutual fund manager AGF Management Ltd., steel distributor Russel Metals Inc., auto-parts maker Magna International Inc. and printer Transcontinental Inc.

Sears might be a good thing
01/03/09 Permlink | Dorfman
"I did a study of stocks analysts love and loath, covering 1998 through 2007. It turns out that the four stocks analysts favored most as each year began did worse over the ensuing 12 months, on average, than the four stocks they most hated. Furthermore, both groups underperformed the Standard & Poor's 500 Index. Over the 10 years, the average despised stock rose 1.7 percent, compared with a loss of 2.2 percent for the adored ones. By contrast, the S&P 500 rose 7.2 percent a year on average."

Buying the bargains in health care, energy
10/09/08 Permlink | Value Investing Dorfman
"Dorfman noted that drug-company stocks are selling at similar multiples to tobacco stocks, "and the last time I looked, tobacco stocks didn't save people's lives." After five years of being sold hard, Dorfman likes the look of pharmaceutical stocks, and he also is interested in metals and energy stocks because they soared early in the year and have now been hammered to bargain levels. Dorfman also suggested that investors avoid the "glamour premium" of gold stocks."

The Robot stalls
07/01/08 Permlink | Value Investing Dorfman
"Each stock we chose early in January had a market value of at least $500 million. They all had announced more than a penny of profit per share in the latest 12-month period. They had more shareholder equity than debt, and a low share price relative to earnings. We chose the cheapest stocks without having more than one in a particular industry sector."

Robot Portfolio displayed human frailties
01/08/08 Permlink | Value Investing Dorfman
"Dorfman named his company Thunderstorm Capital in honour of those stocks that rise in popularity after a "frightening but temporary event that usually passes without lasting damage." The Canadian stocks we selected using his method each had a market value of more than $500 million. They had reported more than a penny of profit per share in the previous four quarters, and had more shareholder equity than debt. Their share price was low relative to recent earnings."

Robot stock portfolio rides high again
07/10/07 Permlink | Value Investing Stocks Dorfman
"Our picks by the data machine for 2007 each had a market value of more than $500 million, more than a penny of profit per share in the latest four quarters reported, more shareholder equity than debt and the lowest share price on the market relative to recent earnings."

9 lessons I learned in the past 9 years
02/13/07 Permlink | Dorfman
"Today I'm putting away my quill to devote fuller attention to Thunderstorm Capital, an investment firm I founded in 1999. For my last column, I'd like to highlight nine lessons that emerged from writing the column in the past nine years." [Doh!]

Value and momentum
02/06/07 Permlink | Value Investing Momentum Dorfman
"People who scour the stock market for bargains tend to buy too early, and I am no exception. To counteract this problem, some value investors look for stocks that show some upward price momentum. Twice a year for the past few years, I have been put together a list of stocks that I think have both value and momentum."

Casualty list
01/23/07 Permlink | Dorfman
"While the average stock rose about 7 percent in the fourth quarter, Archer-Daniels-Midland Co. fell 15 percent. That earns it a place -- along with Lincoln Educational Services Corp., Crane Co. and Motorola Inc. -- on my quarterly Casualty List. The list contains stocks that have been roughed up in the previous quarter, and that I think have good potential to recover and make new highs."

Robot shows it pays to buy outcasts
01/17/07 Permlink | Value Investing Dorfman
"Canada has proven in the early going to be a profitable stomping ground for John Dorfman's robot stock selector. A portfolio of 10 out-of-favour stocks selected a year ago using the Boston money manager's automated filtering technique produced a hearty 31 per cent investment return. "

Robot's winning streak snaps at 7 years
01/02/07 Permlink | Dorfman
"The 'Robot' starts with the universe of U.S. stocks with a market value of $500 million or more. It eliminates those companies whose debt is greater than stockholders' equity, and also slices off those with negative earnings over the past four quarters. From the approximately 1,000 stocks that remain, the Robot selects the 10 with the lowest price-earnings ratios (stock price divided by the past four quarters' earnings)."

Give me your tired, your poor, your big losers
12/19/06 Permlink | Dorfman
"The dregs. That's what you might call the stocks I'm writing about this week. They are the 10 stocks down the most this year, among the stocks in the Standard & Poor's 500 Index. Why bother looking at such a bunch of losers? For a simple reason: This year's scurvy dog may be next year's best in show."

Bunny's picks
12/12/06 Permlink | Dorfman
"What is this Bunny Portfolio? It is a simple computer-driven stock-selection program that I devised seven years ago. To qualify as a candidate, a stock must: * Have 25 percent compound average annual earnings growth for the past five years. * Sell for 12 times earnings or less. * Trade in the U.S. * Have a market value of $250 million or more. Usually, about three dozen stocks a year meet the entrance requirements. This year, 73 stocks did. To narrow the field to 10 stocks, I take the five with the fastest historical earnings growth rates, and the five with the lowest price relative to the previous four quarters' earnings."

Appealing small stocks
12/05/06 Permlink | Dorfman
"For this column, I used a Bloomberg stock-screening program to identify stocks with a market value of $250 million to $1 billion, selling for 15 times earnings or less, with debt less than equity. I also required good profits in the latest fiscal year, with a return on equity of at least 15 percent. Fifty-seven stocks passed the screen, and I am recommending seven of them here."

January bounce candidates
11/28/06 Permlink | Dorfman
"Every year, some stocks are unfairly kicked while they're down. Stocks that have had a tough year often get roughed up more in October and November as investors dump their losers for tax reasons. By selling stocks that are down, investors can offset gains elsewhere in their portfolios. As a side effect of this tax maneuvering, some decent stocks get undervalued near year-end, paving the way for a 'January bounce.'"

Purloined portfolio
10/31/06 Permlink | Dorfman
"Once a year, I devote this column to investment ideas stolen from other investment managers whom I respect. Call it homage, competition research, or just good dirty fun. This year my lineup of seven 'victims' to pilfer ideas from is the same as last year's: Scott Black, David Dreman, Randall Eley, Mason Hawkins, Ken Heebner, David Katz and Charles Royce."

New lows list
10/24/06 Permlink | Dorfman
"In the past week, while the financial pages highlighted the news about the Dow Jones Industrial Average climbing past 12,000 for the first time, 15 stocks with market values of $500 million or more each touched 52-week lows. Bargain hunting among stocks on the New Lows list can be dangerous. But danger, better known as risk, is an inherent part of the stock market. Sometimes you can snatch real bargains from the New Lows list."

Dividend appeal
10/17/06 Permlink | Dorfman
"A company that pays an above-average dividend, and that has increased its dividend at an above-average rate, must be doing something right. Dividends are an indicator of financial health. They show a desire to treat shareholders well. Even better, a rising dividend indicates a board's confidence in a company's future in a way that mere words never can."

Billion-dollar portfolio
10/10/06 Permlink | Dorfman
"Each October beginning in 2001 I have compiled a Billion- Dollar Portfolio, recommending 10 stocks with a market value very close to $1 billion. The average 12-month return for this portfolio in the past five years has been 28 percent, versus 9 percent for the Standard & Poor's 500 Index. So far, all five Billion-Dollar Portfolios have been profitable and outperformed the S&P 500."

Dorfman's new casualty list
10/03/06 Permlink | Dorfman
"Buying stocks of good companies when they are down is a time-tested investment method. In this column, I try to incorporate that approach into a quarterly Casualty List. It contains stocks that have been roughed up in the latest quarter, and that I think have strong potential for a comeback."

15-15 Screen
09/27/06 Permlink | Dorfman
"Exxon Mobil Corp., Berkshire Hathaway Inc. and K-Swiss Inc. all pass a simple but important test. Their earnings have been growing at a pace of at least 15 percent annually the past five years. Even so, their shares are inexpensive, selling for less than 15 times the past four quarters' earnings. That's a combination I like."

Short-selling contest
09/22/06 Permlink | Dorfman
"Who likes wars, recessions, hurricanes, terrorist threats and corporate scandals? Short sellers do, if you listen to their detractors. Short sellers are investors who profit when a stock declines. Some folks view these renegade investors as antisocial. I have a more positive view."

U.S. diversifiers
09/13/06 Permlink | Dorfman
"While Europeans often pepper their portfolios with stocks from several countries, Americans often stick with U.S. stocks. I like the American market very much, yet a portfolio exclusively based in the U.S. may be too plain vanilla. If you stick to only one country, you may miss some bargains. You certainly miss the chance to diversify."

Dorfman's ratings on the 20 largest U.S. stocks
09/08/06 Permlink | Dorfman
"The largest stocks rarely sizzle. Yet many people like them for their safety, stability and liquidity. Each September since 2001, I have offered ratings on the 20 largest U.S. stocks. My 'buy' rated big caps have provided an average annual return of about 10 percent, including dividends."

The 2006 sane portfolio
08/22/06 Permlink | Dorfman
"The Sane Portfolio, which I compile each August, is designed as a middle-of-the-road, slightly conservative collection of a dozen stocks. To be eligible for inclusion, a stock doesn't have to be outstanding in a single respect; rather, it must be fairly good in most respects."

Stocks Benjamin Graham might like
08/15/06 Permlink | Dorfman
"Ben Graham, the father of value investing, has been dead for 30 years. Hundreds of disciples, however, keep alive his bargain-hunting style. Most of us are less strict in our criteria than Graham was. His definition of 'cheap' was stringent, and his balance-sheet criteria were exacting."

Good based on cash flow
08/08/06 Permlink | Dorfman
"Most assets gradually lose their value over time. That's why accounting rules specify depreciation schedules for assets such as factories, equipment or oil in the ground. In the real world, the assets may be depreciating faster or slower than accounting rules assume. They may even be appreciating. That's why some analysts like to look at stocks through the lens of cash flow instead of earnings. Cash flow is a measure of actual cash flowing into and out of a business."

Perfect 10 Portfolio
08/05/06 Permlink | Dorfman
"My Perfect 10 portfolio contains 10 stocks, each one selling for 10 times earnings, as of the time the portfolio was created (this year, July 21). That is cheap compared to the current multiple on the S&P 500 (about 17) and the long-term average (about 15). In the six years that I have compiled the Perfect 10 Portfolio, it has achieved an average one-year return of 17 percent, compared to 2.2 percent for the S&P 500. It has beaten the index four times out of six."

Value and Momentum
08/05/06 Permlink | Dorfman
"Buying on bad news is a technique often used by value investors, people like me who scour the stock market for bargains. Of course, worse news can follow. That's why some folks prefer to buy stocks that are in rising, not falling, trends. Twice a year, for people who like their value leavened with a touch of momentum, I compile a list of stocks that I think offer both."

Good on price-to-sales ratio
07/18/06 Permlink | Dorfman
"When people go hunting for cheap stocks, several ratios can serve as range finders. One is the price-to-sales (P/S) ratio, which is a stock's price divided by the company's per-share sales (or revenue). The P/S ratio is a cousin of the more familiar price-to- earnings (P/E) ratio, in which the denominator is per-share earnings, rather than sales. In an era when accounting tricks are rife, sales figures are somewhat more resistant to manipulation than earnings numbers. If a company isn't very profitable, it may not look cheap based on its P/E ratio. Yet it may have a low P/S. In that case, it may be a turnaround candidate, ripe for a shape-up campaign by new management."

The casualty list
07/11/06 Permlink | Dorfman
"Parker Drilling Co. and Boston Scientific Corp. were banged hard in the second quarter. I think their chances for recovery are excellent, and have put them on my Casualty List -- a quarterly compilation of stocks that have been knocked around, and that I think will bounce back."

Value plus growth
07/05/06 Permlink | Dorfman
"Just as a person can have both beauty and brains, a stock can possess both growth and value characteristics."

Dorfman performance review
06/27/06 Permlink | Dorfman
"Here is an update on five of my favorite special portfolios. The Robot Portfolio and the Bunny Portfolio are computer guided. The Sane Portfolio, the Perfect 10 Portfolio and the Billion- Dollar Portfolio are computer assisted."

5 Nasdaq stocks that might rise
06/20/06 Permlink | Dorfman
" Cincinnati Financial (CINF), based in Fairfield, Ohio, sells property & casualty insurance, engages in leasing and financing activities, and offers investment management services. Cincinnati Financial stock sells for 15 times earnings, 1.3 times book value and 1.8 times revenue, all reasonable multiples in my opinion. It yields 2.9 percent in dividends. Yet the picture is better than it appears. Cincinnati Financial owns almost 13 percent of Fifth Third Bancorp, a banking company with a market value of more than $20 billion. If you adjust for that holding, Cincinnati Financial sells for only 10 times earnings from operations."

Undiscovered bargains among the cheapies
06/13/06 Permlink | Dorfman
"The average U.S. stock sells for about $26 a share. For some investors, that's too much. They prefer stocks selling for $5 to $10. Intuitively, these investors believe that a $5 to $10 stock has 'more room to grow.' You can call this irrational if you want. There's little difference between owning 10 shares of a $40 stock and 100 shares of a $4 stock. Yet there is some method to the madness of people who prefer cheap stocks in the sense of raw price. It comes down to the difference between institutional investors and individuals. Institutions such as mutual funds, insurance companies and pension funds typically pay commissions of 1 cent to 6 cents a share. And they deal in thousands, or tens of thousands, of shares at a time. For them, $5 to $10 stocks run up a higher commission tab because they need to purchase more shares to equal, say, 2 percent of their portfolio. Small investors, by contrast, often pay a flat fee to trade. To them, there is no harm to them in buying low-priced shares. Some institutional buyers also regard lower-priced stocks as less respectable than higher-priced ones. So $5 to $10 may be only scantily covered by Wall Street analysts. That's why individuals can sometimes find undiscovered bargains among the cheapies."

Doubled, still cheap
05/23/06 Permlink | Dorfman
"Don't automatically sell big gainers, unless it's necessary to achieve adequate diversification in your holdings. Instead, make a judgment call in each case. Is the stock still cheap? Do its prospects still look good? If so, let your big winner ride, unless it exceeds 10 percent of your portfolio. "

Allstate and CBS have joined the do-nothing club
05/16/06 Permlink | Dorfman
"Take a look at the last five stocks you bought. Before you took the plunge, were they moving up, down or sideways? Many people instinctively gravitate to stocks that have been moving up. Others, like me, are drawn to those that have just fallen. Not many investors are interested in the 'sideways' stocks. People see them as dull, directionless and boring."

Low-debt appeal
05/09/06 Permlink | Dorfman
"In picking stocks, low debt may sound like an old-fashioned virtue from the time of crinoline skirts and hand-tied bow ties. It's not. The low-debt stock lists I've presented in this column annually for the past eight years have shown an average 12-month total return of 45 percent. By contrast, the average return for the Standard & Poor's 500 Index for the same eight periods has been 5.3 percent."

Think twice before purchasing these stocks
04/28/06 Permlink | Dorfman
"Last weekend I screened the Bloomberg database for stocks that sell for more than three times revenue, even though they posted a loss in their latest fiscal year and their revenue has been growing at less than a 3 percent annual pace in the past five years. I found 13 such stocks, and will discuss seven of them in this column. The seven are the largest, the most indebted, and those with the worst losses recently."

The old faithful screen
04/19/06 Permlink | Dorfman
"Seven times beginning in July 1999, I've compiled a list of stocks from the Old Faithful screen. The average one-year gain has been about 30 percent, compared to an average loss of 1.1 percent for the Standard & Poor's 500 Index. The average three-year gain (for the five lists that have three-year results) has been 115 percent, compared with a 5.6 percent loss for the S&P."

Cheapskate walks, quicksilver runs
04/12/06 Permlink | Dorfman
"The Cheapskate Portfolio is entering its fifth year, and is on probation. Its record isn't bad -- just not as good as I had hoped. If results don't improve, I'll probably discontinue it after the fifth year. The Quicksilver Portfolio is just a sophomore. It is off to a terrific start, up 30 percent in its first year."

Intel, Pilgrim's Pride have joined the casualty list
04/04/06 Permlink | Dorfman
"Pilgrim's Pride Corp. and Westwood One Inc. were knocked around in the first quarter. I think they have substantial potential to bounce back. I also see rebound potential in Intel Corp. and Swift Energy Co. All four of these stocks declined significantly in the first quarter. I have put them on my Casualty List."

The new lows list
03/28/06 Permlink | Dorfman
"Buying a stock on bad news is a good tactic -- provided the unfavorable news proves temporary. One place to look for downtrodden stocks is the New Lows list, a roster of stocks that have hit 52-week nadirs."

Beware shares at 100 times sales
03/27/06 Permlink | Dorfman
"Each of these companies sells for 100 times revenue or more. Over the past six years I have demonstrated in this column that investing in such stocks is usually a sucker's bet."

Balance-sheet powerhouses
03/27/06 Permlink | Dorfman
"Remember Scrooge McDuck from comics of yore? He would sit on a pile of cash and diamonds, relishing the feel of his wealth. Few of us will ever know McDuck's smug feeling. As consolation, we can invest in companies that are cash rich and have few if any debts."

Value and momentum
03/07/06 Permlink | Dorfman
"To qualify this time, a stock had to be up at least 6.3 percent year-to-date through March 3 (double the S&P 500's gain), and up at least 10 percent in the past 12 months. It also had to sell for 15 times earnings or less. From 40 qualifiers I've selected five to recommend: ConocoPhillips, Valero Energy (again), Cummins Inc., American Financial Group Inc. and Jakks Pacific Inc."

10 stocks for long haul
02/21/06 Permlink | Dorfman
" As an investment technique, I don't recommend buying shares and forgetting about them, even though the results are sometimes pleasant. Still, I get occasional requests from readers for a list of stocks you can buy and leave alone for 10 years. So, here is my collection of 10 Stocks for the Long Haul."

The stumblers list
02/14/06 Permlink | Dorfman
"No one likes to falter at the start of a race. Yet a bad start doesn't rule out a victory. Every February I try to identify a few stocks that have stumbled out of the gate but that I think will regain their stride. Among the stocks I want to highlight this year are Pilgrim's Pride Corp. and Murphy Oil Corp."

Nonsensical Nine
02/12/06 Permlink | Dorfman
"For the Nonsensical Nine, I look at U.S. stocks with a market value of $1 billion or more, selling for at least three times book value (assets minus liabilities per share). Then I select the three stocks that sell for the highest multiple of earnings, the three that sell for the highest multiple of revenue, and the three that have the highest ratio of debt to equity."

January market moves suggest an up year in '06
01/31/06 Permlink | Dorfman
"Stock-market investors love to take the market's pulse -- and never more so than in January. According to market lore, January has two special attributes. It tends to be a good month. And, good or bad, it tends to predict the rest of the year."

ConocoPhillips and NBTY are on the casualty list
01/24/06 Permlink | Dorfman
"The list comprises stocks that have been roughed up in the latest quarter, and that I think have sound underlying businesses. I predict they will rebound."

Robot portfolio steams to 7th-straight victory
01/03/06 Permlink | Dorfman
"For the seventh-consecutive year, the Robot Portfolio has vanquished the Standard & Poor's 500 Index, outperforming me and most other money managers I know. The Robot's return for 2005 was 29.2 percent, as against 4.9 percent for the index. Figures are total returns, including dividends. What is this Robot Portfolio? It is a simple computer- driven model that selects deeply out-of-favor stocks."

10 Favorite Value Stocks for 2006
12/28/05 Permlink | Dorfman
"My favorite stocks for 2006 range from well-known names like New York Times Co. to obscure ones like Schnitzer Steel Industries Inc. None of these stocks are investors' darlings right now. And that's the way I like it. I believe that buying unpopular stocks is a better path to wealth than buying popular ones."

John Dorfman's small stocks
12/06/05 Permlink | Dorfman
"I'm partial to small stocks, partly because they are followed by fewer investors than large stocks. That increases my chance of finding a bargain."

5 stocks that might exploit a year-end bounce
11/22/05 Permlink | Dorfman
"As a year winds down, many people sell their losing stocks to reduce their income tax. Traditionally, some of these stocks get oversold. They often bounce back in January as bargain hunters swoop in."

Simmering Six and Six-High Six
11/01/05 Permlink | Dorfman
"Each November, I write about two groups of stocks. One I call the Simmering Six. These are half a dozen stocks that have risen strongly in the first 10 months of the year, yet still meet some basic value criteria. These are stocks I like. The other group is the Sky-High Six. These are the six stocks with the highest price-earnings ratios among companies with a market value of $500 million or more and earnings per share of a dime or more. Almost without exception, these are stocks I would avoid."

Polaris and Exxon show high profit and low debt
10/22/05 Permlink | Dorfman
"Two qualities I love in a company are high profitability and low debt. High profits signal that a company is doing something right -- providing superior service, offering an innovative product or filling a need that others haven't yet discovered. The allure of low debt is subtler. It's not just a matter of averting bankruptcy. Low debt allows a company the luxury of choice. For example, it can acquire strapped competitors, increase dividends or pour money into new products."

ConocoPhillips, GM are in my purloined portfolio
10/18/05 Permlink | Dorfman
"Once a year, I turn myself into a thief. Don't call 911. What I'm stealing are stock ideas from some of my favorite money managers. Yes, they are my competitors. But most of them are also my friends. And my theft is accomplished by combing through public filings of their holdings."

Lexmark and Brunswick hit new lows
10/13/05 Permlink | Dorfman
"The New Lows list -- a daily compilation of stocks hitting 52-week lows -- is a rich hunting ground for stock-market bargain hunters."

Pfizer and Kimberly-Clark show dividend appeal
10/11/05 Permlink | Dorfman
"Don't scoff at dividends. In flat and down years, they are a big component of total return in the stock market. And they are sincerity barometers, giving an indication of how much faith a company's board really has in its prospects."

Amerigroup and Diebold are on the casualty list
10/09/05 Permlink | Dorfman
"Amerigroup Corp. stock was smacked around last quarter, ending with a 52 percent loss. Diebold Inc. was beaten down 23 percent. Wabash National Corp. was roughed up for a 19 percent decline, and H&R Block Inc. was bruised with a 17 percent thrashing. I am putting those four stocks on my quarterly Casualty List. At the end of each quarter, I put a few stocks that have suffered big declines, and that I think have comeback potential."

Schnitzer, Chevron, Reebok pass '15-15' screen
09/22/05 Permlink | Dorfman
"The concept is pretty simple. These stocks show earnings growth of 15 percent or better for the past five years. And they sell for 15 times earnings or less. Hence the name 15-15. This year only 6 percent of the 2,448 U.S. stocks with a market value of $500 million or more passed the screen."

Eight big-cap stocks to buy
09/14/05 Permlink | Dorfman
"Small and mid-sized stocks are my investment territory, but many people like the relative safety and stability of large stocks. Accordingly, once a year I offer my opinion on the 20 largest U.S. stocks by market value. "

Occidental and Ryland return to sane portfolio
08/24/05 Permlink | Dorfman
"I designed the Sane Portfolio in August 1999 as a middle-of-the- road, slightly conservative portfolio. Since then, I have refreshed its holdings each August. For the past six years the average 12- month return on the Sane Portfolio has been 14.9 percent, compared with 0.1 percent for the Standard & Poor's 500 Index. All performance figures in this article are total returns including dividends."

Chubb, U.S. Steel look cheap based on cash flow
08/18/05 Permlink | Dorfman
"The corporate scandals of the past four years have made a lot of investors cynical about reported earnings. Earnings can be manipulated -- and even when they aren't, they can be unintentionally deceptive. No single measure of corporate performance or stock value is perfect or totally tamper- proof. That's why many professional investors look at stocks using several different measures. One useful lens is the price-to-cash-flow ratio."

Ingram Micro, Sunoco look cheap on price-sales
07/15/05 Permlink | Dorfman
"Of all the arrows in the value investor's quiver, the one that best points to potential turnarounds is the price-to-sales ratio. Most investors are more familiar with the price-earnings ratio, published daily in many newspapers. It is a stock's price divided by the company's per-share earnings. A high ratio indicates that investors expect good things ahead; a low ratio shows that they distrust a company's prospects. The price-sales ratio works the same way, except that the denominator in the fraction is a company's sales per share."

10 stocks showing value and growth
07/10/05 Permlink | Dorfman
" Value stocks are cheap relative to a measure of intrinsic worth, such as earnings. Growth stocks exhibit a rapid increase in sales, earnings or both. Usually the two types of stocks are mutually exclusive, though occasionally a company will display both growth and value characteristics. They often make good buys."

U.S. Steel and Molson Coors are on casualty list
07/10/05 Permlink | Dorfman
"Sigmatel Inc., First Marblehead Corp., U.S. Steel Corp., Commercial Metals Co. and Molson Coors Brewing Co. were bruised in the second quarter. These five stocks are on my quarterly Casualty List, devoted to stocks that have been banged up and that I think have a good chance to recover. Previous Casualty List stocks have beaten the Standard & Poor's 500 Index by an average of 58.3 percentage points."

Ariba, Stewart lead list of $5 to $10 picks
06/16/05 Permlink | Dorfman
"Rightly or wrongly, some investors believe that a $5 to $10 stock has more room for appreciation than a higher-priced stock and offers a more exciting ride. Devotees of low-priced stocks also like that the low price allows them to purchase more shares, and leads them to stocks that aren't widely followed by Wall Street. A stock's price tells you almost nothing. There are good stocks and bad stocks in any price range. The price is partly determined by the number of shares a company issues."

General Motors joins five below-book picks
06/09/05 Permlink | Dorfman
"For the coming 12 months, I recommend five stocks that are selling 'below book.' They are Phoenix, General Motors, Molson Coors Brewing Co., Piper Jaffray and TD Banknorth Inc."

Risk factors to ponder when picking stocks
05/06/05 Permlink | Dorfman
"When compiling a list of stocks that should come with a warning label, there are three risk factors that are to be considered: 1) A loss in the latest reported fiscal year. 2) Average annual sales growth of less than 3% in the last five years. 3) Stock price of at least 3 times sales per share."

Exxon, Old Republic head low-debt stock list
05/05/05 Permlink | Dorfman
"Companies with low debt are sitting pretty. Let the Federal Reserve do its worst in raising interest rates. These companies have little to fear. What's more, they can afford to make strategic acquisitions, and they will never be forced to sell assets to stave off creditors."

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