In our most recent Validea Hot List newsletter, we highlight the investment philosophy of John Neff, who managed the Vanguard Windsor Fund from 1964 to 1995 (during which time the fund averaged a 13.7 percent return versus the S&P 500’s 10.6 percent). Neff’s strategy focused on the price-earnings ratio as a gauge of investor expectations for a company’s future growth—an important factor according to this market guru. We explain the Neff methodology, founded on the notion that “high-flying growth stocks with high P/Es were very sensitive to any disappointment compared to expectations,” while he found low P/E stocks to have […]
For legendary investor John Neff, who managed Vanguard’s Windsor Fund from 1964 to 1995, a stock’s price-earnings ratio represented a measure of what level of growth investors are expecting a company to achieve in the future. This according to a recent Nasdaq article by Validea CEO John Reese. The expectation factor, writes Reese, “was paramount for Neff, who found that high-flying growth stocks with high P/E’s were very sensitive to any disappointment compared to expectations.” But Neff saw the upside potential in this scenario if an investor was able to find those stocks that were unfairly beaten down. Reese outlines […]
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 […]
Unloved but promising stocks were just the ticket for Investment guru John Neff. While managing the Windsor Fund for more than 30 years, his conservative approach earned an average 13.7% annual return and beat the market by an average of 3.1% per year. In his article for TheStreet.com this week, Validea CEO John Reese describes this Low P/E Investor’s philosophy and offers some fundamentally solid stock picks. Scripps Networks Interactive, Inc. (SNI) is a developer of lifestyle-oriented content for linear and interactive video platforms including television and internet brands. Our Neff-based strategy likes the company’s EPS growth of 9.7%, which […]
Every other issue of the Validea Hot List newsletter examines in detail one of John Reese’s computerized Guru Strategies. This latest issue looks at the John Neff-inspired strategy, up 19.0% year-to-date vs. 8.9% for the S&P 500. Below is an excerpt from the newsletter, along with several top-scoring stock ideas from the Neff-based investment strategy.