March 18, 2015
ATTENTION
Advanced Investors and Finance Professionals:
If you are reading this you should download ValuEngine
Institutional Software to see how VE’s powerful quantitative
tools can increase your productivity and effectiveness. |
VALUATION WATCH: Overvalued stocks now make up 56.64% of our stocks assigned a valuation and 19.85% of those equities are calculated to be overvalued by 20% or more. Eleven sectors are calculated to be overvalued--with six at or near double digits.
--Three for Three
VE Forecast Market Neutral Newsletter Posts Double-Digit Gain for Third Month in-a-Row
Our portfolio posted yet another double-digit gain this month. Our 50/50 allocation picked up a whopping 11.36% versus the benchmark MLSAX's* loss of 0.59%. That's a huge beat of 1195 bps. The modified stop-lossed strategy with a suggested 60-40 allocation trailed slightly with a gain of 10.89%. The trailing 12 month percentage return is 16.26% for the newsletter and 7.68% for the MLSAX Long-Short Fund—and 11.59% for the SP500. Since inception, our portfolio has returned 128.75% vs the MLSAX return of 30.18%.
Find Out More About the VE Forecast 16 MNS HERE
Longs were decent this month with nine winners overall. We continued to ride 1800Flowers to another 20% pick up, but that big gain was surpassed by Argentine bank BBVA Frances with a huge 34% gain. Orbital ATK continued to impress with another double-digit gain as well. Our shorts also helped out due to the market volatility this month. We had a 75% hit rate there, with seven stocks at or near double-digit returns.
This marks the third month in-a-row we have scored a double-digit return with the VE Forecast MNS Newsletter. Our December/January portfolio returned 12.54%, the January/February edition returned 10.15%, and now we have the 11.36% gain this month. It's been quite a quarter for this newsletter.
Valuations are currently mixed. Each big up or down day shifts them around a bit. As of today, 56.64% of the stocks we can assign a valuation are calculated to be overvalued-- with 19.85% of them calculated to be overvalued by 20% or more. The big question for the market currently is impending Fed action.
All eyes are on Janet Yellen and her definition of “full employment.” That will have the greatest short-term effect on US equity pricing right now. We see a Fed that has had to re-adjust historic thinking because the decline in unemployment has not shown an increase in wage pressures (inflationary) at the same time the overall economic environment is deflationary and not
showing sings of stress either.
Today's news from the Fed was good for stocks. Janet Yellen noted that the Fed is no longer so "patient"-- but re-affirming the 2% inflation rate as a benchmark for short-term rate hikes. According to the Wall Street Journal, Yellen noted that the “overall measures of equity valuations are on the high side but not outside of historical ranges.” Looking at overall financial stability, Yellen noted that “our overall assessment at this point is that threats are moderate.” She went on to say that a stronger labor market would increase her confidence that inflation will move up over time. But Fed officials still expect inflation to remain low because of downward pressure from energy prices and the dollar.
All of this positive Fed news sparked a rally today..
Here are the primary long and short-side selections and their performance for the month.
Position |
Ticker |
Company Name |
|
Exit Price |
Change |
%Change |
Sector |
Long 1 |
OA |
ORBITAL ATK INC |
66.38 |
75.96 |
9.58 |
14.43 |
AEROSPACE |
Long 1 |
MGA |
MAGNA INTERNATIONAL |
103.51 |
105.32 |
1.81 |
1.75 |
AUTO TIRES TRUCKS |
Long 1 |
MTX |
MINERAL TECH |
71.54 |
70.88 |
-0.66 |
-0.92 |
BASIC MATERIALS |
Long 1 |
BBSI |
BARRETT BUSINESS SERVICES |
39.79 |
42.43 |
2.64 |
6.63 |
BUSINESS SERVICES |
Long 1 |
MU |
MICRON TECHNOLOGY |
31.81 |
27.66 |
-4.15 |
-13.05 |
COMPUTERS TECHNOLOGY |
Long 1 |
LEN |
LENNAR CORP -A |
50.24 |
48.86 |
-1.38 |
-2.75 |
CONSTRUCTION |
Long 1 |
STRZA |
STARZ-LIBERTY CAPITAL |
31.4 |
33.55 |
2.15 |
6.85 |
CONSUMER DISCRETIONARY |
Long 1 |
SAFM |
SANDERSON FARMS |
81.73 |
80.01 |
-1.72 |
-2.10 |
CONSUMER STAPLES |
Long 1 |
BFR |
BANCO FRANC-ADR |
17.16 |
23.02 |
5.86 |
34.15 |
FINANCE |
Long 1 |
UEPS |
NET 1 UEPS TECH |
13.46 |
13.83 |
0.37 |
2.75 |
INDUSTRIAL PRODUCTS |
Long 1 |
LCI |
LANNETT INC |
63.28 |
66.44 |
3.16 |
4.99 |
MEDICAL |
Long 1 |
LDL |
LYDALL INC |
30.88 |
32.13 |
1.25 |
4.05 |
MULTI-SECTOR CONGLOM |
Long 1 |
MUSA |
MURPHY USA INC |
71.99 |
70.95 |
-1.04 |
-1.44 |
OILS ENERGY |
Long 1 |
FLWS |
1800FLOWERS.COM |
10.36 |
12.5 |
2.14 |
20.66 |
RETAIL WHOLESALE |
Long 1 |
GBX |
GREENBRIER COS |
57.34 |
56.37 |
-0.97 |
-1.69 |
TRANSPORTATION |
Long 1 |
BIP |
BROOKFIELD INFRASTRUCTURE |
43.95 |
43.06 |
-0.89 |
-2.03 |
UTILITIES |
Short 1 |
KTOS |
KRATOS DEFENSE |
5.96 |
5.37 |
0.59 |
9.90 |
AEROSPACE |
Short 1 |
NAV |
NAVISTAR INTERNATIONAL |
29.16 |
30.54 |
-1.38 |
-4.73 |
AUTO TIRES TRUCKS |
Short 1 |
WPP |
WAUSAU PAPER CP |
9.5 |
9.27 |
0.23 |
2.42 |
BASIC MATERIALS |
Short 1 |
MRIN |
MARIN SOFTWARE |
6.72 |
5.95 |
0.77 |
11.46 |
BUSINESS SERVICES |
Short 1 |
GEOS |
GEOSPACE TECHNOLOGY |
19.03 |
15.52 |
3.51 |
18.44 |
COMPUTERS TECHNOLOGY |
Short 1 |
RYN |
RAYONIER INC |
26.81 |
26.84 |
-0.03 |
-0.11 |
CONSTRUCTION |
Short 1 |
LF |
LEAPFROG ENTERPRISES |
2.58 |
2.16 |
0.42 |
16.28 |
CONSUMER DISCRETIONARY |
Short 1 |
RDEN |
ELIZABETH ARDEN |
16.68 |
15.58 |
1.1 |
6.59 |
CONSUMER STAPLES |
Short 1 |
GNW |
GENWORTH FIN\ANCIAL |
8.09 |
7.35 |
0.74 |
9.15 |
FINANCE |
Short 1 |
CFX |
COLFAX CORP |
52.29 |
48 |
4.29 |
8.20 |
INDUSTRIAL PRODUCTS |
Short 1 |
INO |
INOVIO PHARMACEUTICALS |
6.85 |
8.56 |
-1.71 |
-24.96 |
MEDICAL |
Short 1 |
CODI |
COMPASS DIVERSFIED |
16.48 |
16.85 |
-0.37 |
-2.25 |
MULTI-SECTOR CONGLOM |
Short 1 |
WTI |
W&T OFFSHORE |
6.33 |
4.92 |
1.41 |
22.27 |
OILS ENERGY |
Short 1 |
IRG |
IGNITE RESTAURANTS |
7.31 |
5.45 |
1.86 |
25.44 |
RETAIL WHOLESALE |
Short 1 |
YRCW |
YRC WORLDWIDE |
20.12 |
18.47 |
1.65 |
8.20 |
TRANSPORTATION |
Short 1 |
CLNE |
CLEAN ENERGY FUELS |
5.18 |
5.02 |
0.16 |
3.09 |
UTILITIES |
|
|
PORTFOLIO TOTAL |
|
|
|
|
|
|
GSPC |
S&P500 |
2097.45 |
2074.28 |
-23.17 |
-1.10 |
|
|
|
LONG PORTFOLIO |
|
|
|
|
|
|
|
SHORT PORTFOLIO |
|
|
|
|
|
Find Out More About the VE Forecast 16 MNS HERE
Want To Know More About Our ValuEngine View Newsletter?
Looking for a monthly portfolio of stock picks which are objective and based on cutting-edge academic theory and Wall St.practice? Then subscribe to The ValuEngine View Newsletter.The ValuEngine View Portfolio is based on our highly-refined and tested ValuEngine Portfolio Strategies along with our proprietary quant-based composite scoring system. The ValuEngine View Newsletter is the product of sophisticated stock valuation and forecast models first developed by Yale Professor of Finance Zhiwu Chen.
The ValuEngine View Newsletter is the product of a sophisticated stock valuation model that was first developed by ValuEngine's academic research team. It utilizes a three factor approach: fundamental variables such as a company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's future 12-month EPS, and the 30-year Treasury yield are all used to create a more accurate reflection of a company's fair value. A total of eleven additional firm specific variables are also used. In addition, the portoflio uses top picks from our Forecast Model. In essence, the portfolio is constructed with the best picks from our main propiretary models
Each month you will receive an electronic copy of our newsletter highlighting 15 potential long positions along with five alternate picks. Our investment strategies focus on dozens of fundamental and technical factors for over 8000 individual stocks, synthesize the data, and then come up with a portfolio. Each newsletter portfolio focuses on maximum potential returns so there are no diversity requirements. Each portfolio pick includes critical ValuEngine valuation and forecast data. These 20 total picks represent the most up-to-date equity assessments of our proprietary models.
Please click HERE to subscribe. You may download a sample copy HERE. After your subscription is approved, you will immediately receive access to download the current issue of newsletter as well as the previous issues, which are all available as PDF files. Each month when the latest issue of the newsletter is released, we will send you an email, informing you to download it from the site. The newsletter is released near the middle of each month.
VE View vs. S&P 500 Index Past Five Years |
|
VE View |
S&P 500 |
Ann Return |
24.78% |
14.56% |
Ann Volatility |
22.28% |
12.35% |
Sharpe Ratio |
1.11 |
1.18 |
Sortino Ratio |
1.88 |
1.53 |
Max Drawdown |
-34.94% |
-11.14% |
The ValuEngine View Newsletter is derived from the ValuEngine Aggressive and Diversified Growth BenchmarkPortfolio Strategies. These strategies are the product of ValuEngine's academic research team and combine cutting-edge financial analysis and portfolio construction techniques with real-world Wall St. know how.
CLICK HERE to Subscribe to the ValuEngine View
The ValuEngine View Newsletter portfolio has 15 primary stock picks and five alternates and is re-balanced once each month. The ValuEngine View Newsletter is published near the middle of each calendar month. An equal amount of capital is allocated to each stock. The monthly returns are calculated from the closing prices on date of publication. The performance calculation does not include any transaction costs.
ValuEngine Market Overview
Summary of VE Stock Universe |
Stocks Undervalued |
40.95% |
Stocks Overvalued |
59.05% |
Stocks Undervalued by 20% |
15.67% |
Stocks Overvalued by 20% |
20.77% |
ValuEngine Sector Overview
|
|
|
|
|
|
|
|
0.13% |
1.63% |
10.65% |
18.77% overvalued |
4.26% |
33.05 |
|
-0.31% |
-0.56% |
7.42% |
16.69% overvalued |
2.37% |
22.47 |
|
0.03% |
-1.10% |
-0.44% |
10.03% overvalued |
4.88% |
25.61 |
|
-0.12% |
-0.94% |
3.41% |
8.78% overvalued |
-2.87% |
31.73 |
|
-0.09% |
-3.09% |
1.30% |
8.45% overvalued |
2.54% |
18.46 |
|
-0.14% |
-1.45% |
1.54% |
8.19% overvalued |
5.62% |
23.78 |
|
0.16% |
-1.04% |
2.92% |
7.77% overvalued |
-1.16% |
25.61 |
|
0.05% |
-0.87% |
2.14% |
7.28% overvalued |
-3.16% |
27.48 |
|
0.10% |
0.60% |
1.34% |
4.63% overvalued |
2.13% |
18.00 |
|
0.42% |
-1.91% |
-1.26% |
3.70% overvalued |
2.72% |
22.33 |
|
-0.27% |
-2.40% |
4.06% |
1.86% overvalued |
-3.17% |
16.23 |
|
-0.09% |
-2.38% |
-1.17% |
0.39% overvalued |
-10.04% |
19.75 |
|
0.26% |
-1.16% |
0.30% |
3.45% undervalued |
2.15% |
21.71 |
|
-0.07% |
-2.74% |
-2.24% |
5.52% undervalued |
-4.27% |
23.30 |
|
0.45% |
-7.63% |
-4.82% |
8.63% undervalued |
-35.74% |
21.06 |
|
-0.46% |
-5.47% |
-2.63% |
8.92% undervalued |
-27.00% |
24.25 |
ValuEngine.com Products and Services
With the ValuEngine Forecast 16 Market Neutral Strategy Portfolio Newsletter, you can run your own portfolio like a hedge fund to manage risk and profit in any market environment. |
|
|
With ValuEngine.com's Premium Website Membership you get forecasts, valuations, and recommendations on more than 7,000 stocks updated every trading day!
NO OBLIGATION, 30-DAY FREE TRIAL! |
|
|
|