Housing Market Confidence is Building

Homebuilder optimism has grown, according to The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) which settled at 65 in September (it had not been that high since October 2015). In an article for TheStreet, Validea CEO John Reese outlines some of the reasons for the upbeat mood and offers the following four picks that look solid based on our guru models: LGI Homes (LGIH) is engaged in the design, construction, marketing and sale of new homes. Consistent growth in earnings-per-share over the past five years, solid revenue growth and a modest price-sales ratio make this stock attractive. NVR […]

Stocks with a Durable Competitive Advantage

A mainstay of Warren Buffett’s investment philosophy is his belief that the strongest companies possess a keen competitive edge against their peers. He looks for businesses that perform consistently, regardless of outside forces, boast brand recognition, and/or provide goods and services people use on a daily basis. In an article for The Globe and Mail, Validea CEO John Reese offers four stock picks that score highly based on their competitive strengths. Apple Inc. (AAPL): The tech behemoth earned Buffett’s thumbs up due to its household-name status and highly coveted consumer products. The company’s predictable earnings and impressive return-on-equity of 29% […]

Canadian Stocks Offer Value

Since the start of the bull market in March 2009, U.S. equities have outperformed Canadian stocks. However, things are changing and the Canadian stock market is coming on strong, writes Validea CEO John Reese in an article for The Globe and Mail. Despite the trend, however, Reese says that Canadian stocks are still “better bargains than their U.S. counterparts.” He cites the rebound occurring in Canada’s commodity and energy stocks and the stability of a new government as factors fueling the trend. Citing Validea’s value-based stock screening models, Reese asserts that stocks identified using the philosophies of Benjamin Graham, Joseph […]

Graham and Buffett Back-to-School Picks

There’s a wide range of expectations for the retail sector with respect to this year’s back-to-school shopping results. In a recent article for Forbes, Validea CEO John Reese offers some data and insights on which retailers might make the grade. According to the National Retail Foundation, an improved sales season would be the first in four years. Total spending for K-12 and college is expected to reach $75.8 billion, up from $68 billion last year. Deborah Weinswig, head of Fung Global Retail and Technology, is quoted as saying, “We expect sales to reach near-record levels—up 2%-3%. There are more kids […]

Focus on the Cold, Hard Facts & Fundamentals

While the importance of numbers in finance may seem painfully obvious, it’s not unusual to hear people discuss markets and investments in terms of opinion and hearsay. In a recent article for TheStreet, Validea CEO John Reese warns that buying stocks on a “hunch” amounts to guessing. Instead, he advocates evaluating buying opportunities based on underlying business fundamentals, the focus of his guru-inspired investment strategies. Among the data points central to these strategies are: debt, price-to-book ratio, return-on-equity and relative strength. Reese offers five stock picks that score well based on these metrics: Polaris Industries (PII) manufactures off-road vehicles and […]