This is a book that gets everything right in broad, but is too insistent on the details. How should you approach value investing from a purely quantitative standpoint? Easy:
Screen out stocks that have relatively high accruals
Avoid companies that may go bankrupt
Margin of safety: choose companies with strong balance sheets and profits
Look for long-term strength in profits.
Buy them cheap.
Buy when informed investors are buying.
But here's the problem. Like the book What Works on Wall Street, Quantitative Value suffers from over-optimization. You pass through the data too many times, and you show great returns from the past, should someone have done it that way. But how much of the result is signal, and how much is an accident?
The broad principles are unavoidably true. Even the measure of quality, Gross Profits as a fraction of Assets, was new to me, but when I read it, I realized that it was a proxy for having a moat, a sustainable competitive advantage. I added it to my screening framework.
Top 5 Supermarket Companies To Invest In Right Now: California Republic Bancorp (CRPB)
California Republic Bank (the Bank) provides an integrated banking solution to its customers. The Company provides a range of products and services, such as deposit and cash management, loans and private banking. The deposit and cash management include real time, online Internet banking, business analyzed checking, IOLTA accounts, NOW Accounts, nationwide network of cash vault centers, remote Deposit capture, fully automated domestic and international wire transfers, lockbox processing services, free worldwide automated teller machines (ATM) and debit cards, credit cards and purchase card services, customized merchant banking services, fraud prevention products including positive-pay, secure online applications, including token device with internal control access, and contractor Retention Escrow Accounts.
The loan services include unsecured lines of credit, secured revolving lines of credit, working capital loans, equipment financing, asset based credit lines, commercial owner occupied real estate loans, investor real estate loans and construction loans. Its private banking includes full array of private banking loans and lines of credit, Bill pay services, and stock secured credit lines and loans.
The Bank provides banking services to commercial entities, their owners, high net-worth individuals and active investors. It provides commercial banking, lending services, deposit services, contractor retention escrow accounts, cash management, remote deposit capture, private banking, online banking and auto finance.
The commercial banking includes online banking services, cash management products and services, remote deposit capture, contractor retention escrow accounts, domestic and international wire transfers, checking accounts, NOW accounts, money market accounts (MMA), savings accounts, certificates of deposit (CDs), corporate credit card, analyzed accounts and IOLTA accounts. The Bank offer lines of credit to provide working capital for day-to-day operations, term loan! s for equipment, and commercial real estate loans for facilities and for investment portfolio.
The cash management includes Account Analysis, Master Agreement Accounts, Account Reconciliation, Remote Deposit Capture (RDC), Online Cash Management, Automated Clearing House (ACH) Services, Bill Pay, Lockbox Services, Positive Pay, Zero Balancing Accounts, Merchant Card, Reverse Wires, Statements on CD Rom, Corporate Credit Card, Courier Service and Bank by Mail.
Advisors' Opinion:- [By CRWE]
Today, CRPB remains (0.00%) +0.000 at $19.00 thus far (ref. google finance Delayed:�� 11:35AM EDT July 29, 2013).
California Republic Bancorp previously reported its results for the second-quarter 2013, reporting quarterly net income of $2.8 million, record net interest margin of 6.41%, record assets of $737.1 million and record deposits of $669.7 million.
CEO Jon Wilcox stated, ��n the second-quarter we not only experienced strong deposit and loan growth, but also continued to invest in our people and infrastructure both in California as well as nationally, while increasing our bottom line and maintaining solid credit quality.��/p>
10 Best Quality Stocks To Watch For 2014: Granite Construction Inc (GVA)
Granite Construction Incorporated (Granite), incorporated on January 24, 1990, is a diversified heavy civil contractors and construction materials producers in the United States. The Company operates in four segments: Construction, Large Project Construction, Construction Materials and Real Estate. The Company operates nationwide, serving both public and private sector clients. Within the public sector, it primarily concentrates on heavy-civil infrastructure projects, including the construction of roads, highways, mass transit facilities, airport infrastructure, bridges, dams and other infrastructure related projects. Within the private sector, it performs site preparation and infrastructure services for residential development, commercial and industrial buildings, and other facilities. The Company owns and leases substantial aggregate reserves and own a number of construction materials processing plants. It also has contractor-owned heavy construction equipment fleets in the United States. In December 2012, it purchased 100% interest of Kenny Construction Company (Kenny).
Construction
Revenue from its Construction segment was approximately 47% of its total revenue during the year ended December 31, 2012. Revenue from its Construction segment is derived from both public and private sector clients. The Construction segment performs various heavy civil construction projects with a large portion of the work focused on new construction and improvement of streets, roads, highways, bridges, site work and other infrastructure projects. These are typically bid-build projects completed within two years.
Large Project Construction
Revenue from its Large Project Construction segment was 41.4% of its total revenue in 2012. The Large Project Construction segment focuses on large, complex infrastructure projects, which typically have a longer duration than its Construction segment work. These projects include major highways, mass transit facilities, bridges, tunn! els, waterway locks and dams, pipelines, canals and airport infrastructure. This segment primarily includes bid-build, design-build and construction management/general contractor contracts. It participates in joint ventures with other construction companies mainly on projects in its Large Project Construction segment. Joint ventures are typically used for large, technically complex projects, including design/build projects, where it is desirable to share risk and resources. Joint venture partners typically provide independently prepared estimates, shared financing and equipment and often bring local knowledge and expertise.
The Company also utilizes the design/build and construction management/general contract methods of project delivery. Under the construction management/general contract method of delivery, it contracts with owners to manage the design phase of the contract with the understanding that it will negotiate a contract on the construction phase when the design nears completion. Revenue from design/build and construction management/general contract projects represented 74.5% of Large Project Construction revenue in 2012.
Construction Materials
Revenue from its Construction Materials segment was 11.1% of its total revenue in 2012. The Construction Materials segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties. It has aggregate reserves that it has acquired by ownership in fee or through long-term leases. Aggregate products used in its construction projects represented approximately 42.7% of its tons sold during 2012.
Real Estate
Granite Land Company (GLC) is an investor in a diversified portfolio of land assets and provides real estate services for other Granite operations. GLC�� investment portfolio consists of residential, as well as retail and office site development projects for sale to home and commercial property developers. The range! of its i! nvolvement in an individual project may vary from passive investment to management of land use rights, development, construction, leasing and eventual sale of the project. Generally, GLC has teamed with partners who have local knowledge and expertise in the development of each property. GLC�� investments are located in Washington, California and Texas. Revenue from GLC was 0.2% of its total revenue in 2012.
Advisors' Opinion:- [By Wallace Witkowski]
Some of the companies most dependent on government for revenue are Harris Corp. (HRS) �with 80% of revenue government-derived; Granite Construction Inc. (GVA) �with 58%; Flir Systems Inc. (FLIR) �with 54%; and Waste Management Inc. (WM) � and Republic Services Inc. (RSG) �both with 50%, according to Goldman Sachs.
- [By Louis Navellier]
If we look at the sector using Portfolio Grader, we see that many of the big names in the group like Flour (FLR), Granite Construction (GVA) and KBR incorporated (KBR) are rated ��ell.��The anticipated spending for both government and private industry simply hasn�� materialized, and the companies are not seeing revenue or profit growth.
10 Best Quality Stocks To Watch For 2014: Victory Electronic Cigarettes Corp (ECIG)
Victory Electronic Cigarettes Corporation, formerly Teckmine Industries, Inc., incorporated on May 19, 2004, is a development-stage company. As of December 31, 2011, the Company was seeking opportunities with established business entities for the merger or other form of business combination with its company. In April 2013, it acquired Victory Electronic Cigarettes LLC.
The Company may acquire assets and establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. As of December 31, 2011, it had not owned any property interests.
Advisors' Opinion:- [By John Udovich]
After marijuana, the electronic cigarette sector and e-Cig stocks or industry players�like�Reynolds American, Inc (NYSE: RAI), mCig Inc (OTCBB: MCIG), Victory Electronic Cigarettes Corp (OTCMKTS: ECIG) and American Heritage International Inc (OTCBB: AHII) is looking like the next hot niche sector for investors. However, electronic cigarette stock investors should be aware of the following�recent good and bad news from the sector that needs to be digested:
- [By John Udovich]
While there is a�new ��tudy��out claiming�that�electronic cigarettes, or so-called e-cigarettes or e-cigs, may contain a comparable level of carcinogens to regular cigarettes,�speculative investors might still want to take a look at�small cap electronic cigarette stocks like�Hop-on, Inc (OTCMKTS: HPNN), Smokefree Innotec (OTCMKTS: SFIO), Vapor Corp (OTCMKTS: VPCO) and Victory Electronic Cigarettes Corp (OTCMKTS: ECIG) as these appear to be the major publicly traded small cap stocks left in the sector. I should note that�all of the�major big tobacco stocks have entered the electronic cigarette market (see Who Are the Big Tobacco Electronic Cigarette Stocks? MO, LO & RAI) through acquisitions or their own R&D initiatives, which might�mean�that an acquisition by big tobacco is off the table as an�exit strategy for investors. �Moreover and as I previously noted, there are concerns about the safety of electronic cigarettes as their popularity grows�while the Wall Street Journal recently reported that the FDA has been in discussions with the e-cigarette industry about a possible online-sales ban of the product.
10 Best Quality Stocks To Watch For 2014: HeartWare International Inc (HTWR)
Heartware International, Inc. (HeartWare), incorporated on June 25, 2010, develops and manufactures small implantable heart pumps, or ventricular assist devices, for the treatment of advanced heart failure. The HeartWare Ventricular Assist System (the HeartWare System), which includes a ventricular assist device (VAD), or blood pump, patient accessories and surgical tools, is designed to provide circulatory support for patients in the advanced stage of heart failure. The core of the HeartWare System is a continuous flow blood pump, the HVAD Pump, which is a full-output device capable of pumping up to 10 liters of blood per minute. The HeartWare System is designed to be implanted adjacent to the heart, avoiding the abdominal surgery generally required to implant similar devices. In August 2012, it acquired World Heart Corporation. As of December 31, 2012, the HeartWare System has been implanted outside of the United States at approximately 168 health care sites in 28 countries. In December 2013, HeartWare International Inc acquired CircuLite, Inc.
Proprietary Pump Technology
The HeartWare System is full-output centrifugal pump designed to be implanted in the chest, directly adjacent to the heart. At the core of the Company�� technology platform is its hybrid system for suspending the impeller, which is the only moving part within the pump. The impeller is suspended within the pump housing by the opposing forces of passive magnets and hydrodynamic thrust generated by the pump impeller, which circulates a cushion of
blood. Once power is applied to the device and the impeller begins to rotate, there are no points of mechanical contact within the pump, thus providing a completely wearless pumping system.
The HeartWare System
The HeartWare System consists of the HVAD Pump, a small, permanently implantable VAD, patient accessories and surgical tools. The HVAD Pump is capable of generating up to 10 liters of blood flow per minute. With a displaced v! olume of only 50 cubic centimeters and a mass of 140 grams, the HVAD Pump is the only full-output pump implantable in the pericardial space, directly adjacent to the heart. It is also the only pump designed to be implanted above the diaphragm in all eligible patients.
The HeartWare MVAD
The miniaturized ventricular assist device (MVAD) is a miniaturized blood pump intended for chronic heart failure patients. The device is a full-output axial flow pump with a fully suspended rotor and a displacement volume approximately one-third that of the HVAD Pump.
The Company competes with Thoratec Corporation, Jarvik Heart, MicroMed Technology, Inc, Berlin Heart AG, Terumo Heart, Inc., Sunshine Heart, Inc and CircuLite, Inc., Evaheart Medical USA, Inc.
Advisors' Opinion:- [By Lauren Pollock]
Medical device company HeartWare International Inc.(HTWR) issued a revenue forecast that fell short of market expectations.
Intrepid Potash Inc.(IPI), the largest potash producer in the U.S., plans to cut its workforce by 7% and cut executive compensation as part of a plan to trim costs in reaction to weaker prices for the fertilizer ingredient.
10 Best Quality Stocks To Watch For 2014: Sector Spdr Trust Sbi (XLI)
Industrial Select Sector SPDR Fund (the Fund) seeks to provide investment results that correspond to the price and yield performance of the Industrial Select Sector of the S&P 500 Index (the Index). The Index includes companies from industries, such as aerospace and defense, building products, construction and engineering, electrical equipment, conglomerates, machinery, commercial services and supplies.
The Fund utilizes a passive or indexing investment approach to invest in a portfolio of stocks that seek to replicate the Index. The Fund�� investment advisor is SSgA Funds Management, Inc.
Advisors' Opinion:- [By L.A. Little]
That leaves just the S&P 500 as the lone survivor of the slow meltdown, yet if one looks to the sectors that comprise the S&P 500, you would be hard pressed to find anything that looks able to push it higher. Of the three major sectors, the Industrial sector (XLI) �has come off the highs with volume expansion; has failed to regenerate higher; and has its own set of twin swing-point lows clustered just below current price.
- [By Ben Levisohn]
The�Consumer Discretionary Select Sector SPDR�(XLY) has dropped 1.1% to $60.39, while the�Financial Select Sector SPDR(XLF) is off 0.9% at $20.23.� Hardest hit is the�Utilities Select Sector SPDR (XLU), which has dropped 1.6% to $37.32, while the Industrial Select Sector SPDR ETF (XLI) has fallen 1% to $46.49. The�Technology Select Sector SPDR (XLK) is the top performer: It�� down 0.5% at $32.39.
- [By Selena Maranjian]
Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you'd like to add some industrial stocks to your portfolio, the Industrial Select Sector SPDR ETF (NYSEMKT: XLI ) could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.
The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The SPDR ETF's expense ratio -- its annual fee -- is a very low 0.18%, and it recently yielded about 2%.
This ETF has performed well, outstripping the world market over the past three, five, and 10 years. As with most investments, of course, we can't expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.
10 Best Quality Stocks To Watch For 2014: Rentech Nitrogen Partners LP (RNF)
Rentech Nitrogen Partners, L.P. is a provider of clean energy solutions and nitrogen fertilizer, to own, operate and grow its nitrogen fertilizer business. The Company primarily produces anhydrous ammonia, or ammonia, and urea ammonium nitrate solution (UAN), at the Company�� facility, using natural gas as its primary feedstock. In November 2012, the Company acquired Agrifos LLC.
The Company�� facility is located in the center of the Mid Corn Belt. The Mid Corn Belt includes the States of Illinois, Indiana, Iowa, Missouri, Nebraska and Ohio. The Company considers its market to be consisted of the States of Illinois, Iowa and Wisconsin.
Advisors' Opinion:- [By Sean Williams]
For this week's round of "Better Know a Stock," I'm going to take a closer look at Rentech Nitrogen Partners (NYSE: RNF ) .
What Rentech Nitrogen Partners does
As you may have correctly suspected from the name, Rentech Nitrogen is a nitrogen-based fertilizer company. It has two production facilities in the U.S., and its fertilizers, which include ammonia, urea ammonium nitrate solution (UAN), and ammonium sulfate, are sold through distribution agreements to help aid farmers with regard to crop yield. - [By Sally Jones] urrent share price is $17.34, or 64.7% off the 52-week high of $49.18.
Down 54% over 12 months, RNF has a market cap of $673.66 million, and trades with a P/B of 13.30. The dividend yield is 13.67%.
Rentech Nitrogen Partners LP is a pure-play nitrogen fertilizer company structured as a publicly traded master limited partnership. The company manufactures and sells nitrogen fertilizer products including ammonia, UAN solution and ammonium sulfate.
Guru Action: As of Sept. 30, 2013, there is one guru stakeholder and one recent insider sell.
As of Sept. 30, 2013, the sole guru owner Jim Simons reduced his position by 14.04%, selling 49,490 shares at an average price of $28.06 for a loss of 38.2%.
Over four losing quarters, he has averaged a loss of 52% on 352,600 shares at an average price of $36.30 per share. Selling, he has averaged a loss of 38% on 49,490 shares at an average price of $28.06 per share.
His current shares of 303,110 represent 0.78% of shares outstanding.
Track share pricing, revenue and net income:
Highlight: Turquoise Hill Resources Ltd. (TRQ)
The current share price is $3.25, or 66.2% off the 52-week high of $9.62.
Down 57% over 12 months, TRQ has a market cap of $3.27 billion, and trades with a P/B of 0.60. The company does not pay a dividend.
Turquoise Hill Resources Ltd. is an international mining company focused on copper, gold and coal mines in the Asia Pacific region. The company has other projects containing molybdenum, rhenium, copper, gold, zinc, silver and uranium.
Guru Action: As of Sept. 30, 2013, there are six guru stakeholders and one recent insider trade.
The top guru owner is RS Investment Management who increased its position by 29.59% in the third quarter of 2013, buying 13,234,642 shares at an average price of $5.12 for a loss of 36.5%.
Over six losing quarters, the firm has averaged a loss of 55% on 57,968,897 shares at an average price
- [By Robert Rapier] While the MLP space is dominated by the oil and gas sector, in last week’s article we began to explore some of the more exotic master limited partnership offerings. This week we continue our exploration of nontraditional MLPs by looking at the partnerships supplying fertilizer.
Rentech (Nasdaq: RTK) has been around for more than a decade, and it has shifted strategies several times. Full disclosure: Rentech’s Chief Technology Officer Harold Wright is a former manager of mine when we were both at ConocoPhillips, and I have visited Rentech’s facility in Commerce City, Colorado.
For most of Rentech’s existence, the company has sought to commercialize alternative fuels. At one time it had ambitions to build a large coal-to-liquids (CTL) plant, but federal legislation ultimately nudged it instead into the biomass-to-liquids (BTL) space. The company did build a BTL demonstration plant, but ultimately shut it down and has now refocused its efforts on becoming “one of the largest wood processing companies in the world.”
During its interesting journey as a company, Rentech acquired two ammonia nitrogen fertilizer facilities, which turned out to be a profit center that funded the alternative energy research. In November 2011, Rentech spun off this fertilizer business into an MLP called Rentech Nitrogen Partners LP (NYSE: RNF).
In the months leading to the spin-off, RTK’s market capitalization was about $200 million. Rentech maintained 60 percent ownership of RNF, and three months after the spin-off RTK’s market cap had risen to $400 million, while investors had bid RNF up to $1 billion. Interestingly, RTK’s share of RNF was worth more than RTK’s entire market cap, a situation that persists. The market currently values Rentech at $482 million, while the valuation of Rentech Nitrogen Partners makes RTK’s 60 percent stake in RNF worth slightly more than $600 million — another illu
10 Best Quality Stocks To Watch For 2014: ThyssenKrupp AG (TKA)
ThyssenKrupp AG is a Germany-based technology holding company operating in seven business areas. The Steel Europe division produces carbon steel flat products. The Steel Americas division is engaged in production, processing and marketing of high-grade carbon steels. The Materials Services division is engaged in global distribution of materials and the provision of complex technical services for the production and manufacturing sectors. The Elevator Technology division is engaged in the area of passenger transportation systems. The Plant Technology division focuses on specialty and large-scale plant construction. The Components Technology division is engaged in manufacturing components for the automotive, construction and engineering sectors as well as for wind turbines. The Marine Systems division focuses on naval and civil shipbuilding. Apart from its business areas, it provides business services, which are diversified into Business Services and Information Technology (IT) Services. Advisors' Opinion:- [By Corinne Gretler]
ThyssenKrupp AG (TKA) slumped 9.3 percent after Germany�� largest steelmaker raised 882.3 million euros ($1.21 billion) through a share sale. Standard Chartered Plc lost 8.1 percent. Sage Group (SGE) Plc, the U.K.�� biggest software maker, rose 6.8 percent after reporting revenue growth that exceeded analysts��estimates. AZ Electronic Materials SA surged 43 percent after Merck KGaA (MRK) agreed to buy it for about 1.6 billion pounds ($2.6 billion).
- [By Sofia Horta e Costa]
ThyssenKrupp AG (TKA), Germany�� largest steelmaker, rose to a five-week high. YOC AG (YOC) surged the most in more than three months after the mobile-phone advertising company said it sold 1.3 million euros ($1.7 million) of shares to increase capital. Lanxess AG (LXS), the chemical maker that joined the DAX in September, retreated 3.4 percent.
- [By Corinne Gretler]
Telekom Austria (TKA) slid 1.6 percent to 5.63 euros. Second-quarter earnings before interest, taxes, depreciation and amortization fell to 330.3 million euros ($439 million) from 364.8 million euros a year earlier. That compared with the average 332.7 million-euro analyst estimate.