Archive | March, 2016

The Knowledge Factor: The Gift That Keeps on Giving

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In thinking about the long-term performance characteristics of the Knowledge Factor we were reminded of a quote from one of our favorite movies, “Christmas Vacation”. Readers who are familiar with this movie surely remember the scene in which Clark Griswold, played by Chevy Chase, having just received his “Christmas bonus” that was delayed in transit, opens the […]

This Looks Like A Pretty Textbook Counter-Trend Rally

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Yesterday, we noted how there has been an “anti-dollar” rally in the market recently. The stocks with the lowest correlation to the dollar (and highest correlation to the yen and euro) have been the best performers over the past month. Today, we have come across another group of stocks that have been on a nice […]

There’s Been An “Anti-Dollar” Movement In The Market Recently

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Part of our investment work is understanding what has or hasn’t been driving the market recently. We quantify this by regressing various valuation, fundamental, estimate, and correlation factors against the market over 1-day, 1-week, 1-month, 3-month and 1-year time periods. Over the past year, North American stocks that have had the lowest correlation to the USD have […]

Why Do So Many Companies Trade At Many Multiples Of Book Value?

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In the United States, nearly half of all companies (48.15%) trade over 3x book value. And if you break out valuations and look at just the more consumer oriented sectors (consumer discretionary, consumer staples, health care, and information technology) then the percentage of stocks that trade at a book value multiple of over three times increases to 66.77%. For those hardcore […]

4 Scary Stock Tops To Avoid

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Company: Regeneron Pharmaceuticals Sector: Health Care Sub-Industry: Biotechnology Key Valuation Metrics: Price to Cash Flow (P/CF): 30.2x Price to Earnings (P/E): 63.2x Price to Book Value (P/BV): 11x Normalized P/CF (5-year trailing): 78.2x Normalized P/E: 98.5x Normalized P/B: 19.3x Company: McKesson Corp Sector: Health Care Sub-Industry: Health Care Distributors Key Valuation Metrics: Price to Cash Flow […]