11/29/2009

11/29/09 Magic Formula Results

The 129 results presented in the prior post:

http://shadowstock.blogspot.com/2009/11/magic-formula-investing.html

I’ve broken the ideas down into potentially more useful groups.

My first “filter” of the original magic formula 129 ideas was as follows:

Share count remaining stable over the past 3 years

1) Average share count over the past 3 years / trailing 12 month share count > .98

Balance sheet strength using cash versus total liabilities

2) Enterprise value (Price – (Cash + Total liabilities))/Price < .90

Also:

-SGA/Revenue over the past 12 months <.35
-Positive cumulative FCF over the past 5 years
-Positive CFFO (cash flow from operations) over the past year

See Results:

http://www.shadowstock.com/ss_112909Filter1.html

EV/Rev < .40

See Results:

http://www.shadowstock.com/ss_112909Filter2.html

Additional comments:

http://www.shadowstock.com/ss_112909NOTES.html


if this post was useful or you have suggestions please let me know. Thanks John

john@shadowstock.com

2 comments:

Anonymous said...

Nice effort!

ShadowStock said...

Thanks, I just wanted to know if the data was being used or read.

Filtering the magic formula results for share count changes, price to sales, enterprise value, or historical FCF versus the current valuation can be useful. ROIC and earnings yield combination is useful but additional rules may also add value.

John