The Magic Formula, introduced in “The Little Book That Beats the Market,” simplifies the complexity of stock selection into a straightforward two-part analysis. At its core, the method examines Return on Capital, which measures how well a company converts its resources into profits, and Earnings Yield, which indicates whether a stock’s price is low compared to its earnings potential. This approach stands out by combining these metrics into a ranking system that automatically identifies two… Read More The post Ten Top Joel Greenblatt Magic Formula Stocks appeared first on Validea's Guru Invest ..read more

In this episode, Jack Forehand and Matt Zeigler discuss their fascinating interview with AQR founder Cliff Asness. They explore several key topics from their conversation, including: Cliff’s humorous take on morning routines and why correlation doesn’t equal causation when it comes to success habits The “Less Efficient Market Hypothesis” and why Cliff believes markets may be becoming less efficient over time, particularly evident in the dot-com bubble and 2019-2020 market events A thoughtful discussion on… Read More The post Practical Lessons from Cliff Asness appeared first on Validea's Guru ..read more

Peter Lynch made his name at the helm of Fidelity’s Magellan Fund, and investment research firm Validea has distilled his investment philosophy into a methodical framework. The approach centers on finding companies that demonstrate growth characteristics while remaining reasonably priced – a strategy known as GARP (Growth At a Reasonable Price). The methodology hinges on the PEG ratio, which measures a stock’s P/E ratio against its earnings growth rate. A PEG ratio under 1.0 may… Read More The post Ten GARP Stocks Peter Lynch Might Like appeared first on Validea's Guru Investor Blog ..read more

Finding stocks that satisfy both Warren Buffett’s quality-focused investment approach and Peter Lynch’s growth-at-a-reasonable-price strategy can help identify exceptionally strong companies. Based on Validea’s analysis, several companies currently pass both legendary investors’ stringent criteria with high scores. The Buffett Strategy: Focus on Quality and Predictability Warren Buffett looks for companies with: The Lynch Strategy: Growth Without Overpaying Peter Lynch seeks: Discover how Validea’s models can help you identify high-quality, long-term investments, even in changing market… Read ..read more

The Graham-Inspired Value Strategy systematically identifies undervalued stocks by focusing on established companies with proven track records rather than speculative opportunities. This approach, developed by Validea based on Benjamin Graham’s investment principles, uses specific criteria: A company must first meet basic operational requirements: annual revenue exceeding $340 million and five consecutive profitable years. The strategy deliberately excludes technology companies, preferring traditional industry sectors. Strong balance sheets are essential. Companies need a current ratio greate ..read more

The Twin Momentum strategy looks at combining traditional price momentum with improving fundamentals to generate market outperformance. The strategy uses seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that are combined into a single fundamental momentum measure. The strategy is based on the research paper “Twin Momentum” by Dashan Huang and looks for stocks that… Read More The post Ten Top Twin Momentum Stocks – January 2025 appeared first ..read more

Technology dividend aristocrats are companies in the technology sector that have consistently increased their dividend payments for at least 7 consecutive years, a lower threshold than the 25 years required for traditional S&P 500 dividend aristocrats. This shorter timeframe reflects the relative youth of the technology sector as dividend payers, since many tech companies historically preferred to reinvest profits into growth rather than pay dividends. Companies that qualify for this category have demonstrated a commitment… Read More The post Ten Top Technology Dividend Aristocrats appear ..read more

Fundamental momentum represents a company’s improvement in operational performance and financial health over time, as measured through changes in key metrics like return on equity (ROE), operating margins, and other fundamental indicators. Unlike price momentum, which looks at historical stock price movements, fundamental momentum focuses on the underlying business performance trends. According to Huang’s research in the Twin Momentum paper, companies showing positive fundamental momentum – specifically those with improving ROE over the previous four… Read More The post Ten Guru-Approved Stoc ..read more

In this episode of Excess Returns, we sit down with Doug Clinton of Intelligent Alpha to explore the fascinating intersection of AI and investment strategy. We discussed how Doug is using large language models (LLMs) like ChatGPT, Claude, and Gemini to build portfolios that aim to beat the market over time. Doug shares insights from his experience launching managing AI-powered investment strategies. We dive deep into how these models actually work behind the scenes, exploring… Read More The post Building Intelligent Alpha Portfolios with ChatGPT | Doug Clinton appeared first on Validea's Guru ..read more

High free cash flow yield stocks represent companies that generate substantial cash relative to their market value, creating several compelling advantages for investors. These companies typically demonstrate strong operational efficiency and have proven their ability to convert revenue into actual cash flow after accounting for capital expenditures and working capital needs. This financial strength often provides companies with greater flexibility to fund growth initiatives, pay down debt, or return value to shareholders through dividends and… Read More The post Ten Top High Free Cash Flow Yi ..read more