Specialization Key to Becoming a Successful Value Investor

Recent worries that market indexes have been skewed higher by a small number of tech companies have started to subside, according to a recent article by Validea CEO John Reese for The Globe and Mail. Reese cites comments by industry experts, including Robert Shiller, Wharton School professor Jeremy Siegel and GMO co-founder Jeremy Grantham, the consensus of which is that the market is not in danger of overheating and may continue to inch upward. “If these expectations become reality,” writes Reese, “It will become all the more important to hunt for value.” However, he argues, this becomes tougher as more […]

Four Cybersecurity Sector Picks

┬áThis month’s widespread and destructive ransomware attack crippled thousands of businesses worldwide, writes Validea CEO John Reese in a recent article for TheStreet.com. Fortunately, the attack didn’t penetrate the U.S. to a great extent, Reese writes, but only thanks to a lucky catch by a British researcher. The level of preparedness in these situations, Reese says, is driven by a business’s expectations regarding what might happen. “This isn’t unlike the world of investing,” he says, because “expectations are often what drive investor behavior and, subsequently, shifts in share value.” Reese explains how Validea views a company’s fundamentals as a “springboard […]

Ken Fisher’s Price-to-Sales Ratio and Super Stock Picks

While investors and the media focus on a stock’s PE ratio, investing guru Kenneth Fisher affords more attention to the price-sales ratio as a valuation measure, writes Validea CEO John Reese in a recent Forbes article. Reese outlines the Fisher investment philosophy and related criteria that inspired one of his stock screening models. Using this model, Reese identifies the following five high-scoring picks: Steelcase (SCS) provides an integrated portfolio of furniture settings, user-centered technologies and interior architectural products. The company has a favorable price-to-sales ratio as well as long-term earnings-per-share growth. Manpower Group (MAN) is a provider of workforce solutions […]

Cautious Dividend Investing a Must

Given the historically low interest rate and return environment, investors hungry for yield have been gravitating toward dividend stocks, but the valuation advantage of this asset class has diminished. This according to an article in this week’s Forbes by Validea CEO John Reese. “Since yield no longer provides a reliable valuation tool” writes Reese, “investors in search of such dividends must be sure to use other metrics to gauge value.” He emphasizes the importance of evaluating a company’s fundamentals and identifies six high-dividend stocks (yields above 3%) that score well according to his guru-based screening models: United Microelectronics (UMC) is […]

Value-Based Picks for the Trump Rally

As the Trump rally continues and stock prices remain elevated, shopping for value stocks may not sound feasible, writes Validea CEO John Reese in this week’s Forbes. He points out, however, that whether or not the market is overbought “shouldn’t matter to a true value investor.” Reese discusses the strategy of value investing legend John Neff, who led the Windsor Fund from 1964 to 1995 and outperformed the market by an average of 3.1% per year. He outlines Neff’s approach and explains the metrics used and the rationale behind them, highlighting the fact that Validea’s Neff-inspired portfolio has outperformed the […]