John Neff and Five Picks for the Low P/E Investor

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 […]

Peter Lynch Style Investing: Simpler is Better

 In an article for this week’s Nasdaq, Validea CEO John Reese highlights the investment philosophy of guru Peter Lynch that centers on the importance of investing in what you know. “Hardly a pithy inside tip” writes Reese, “but very characteristic of the Lynch approach.” Lynch generated one of the most impressive track records of all time during his tenure as manager of Fidelity’s Magellan Fund from 1977 to 1990. Reese outlines the concepts that form the foundation of his common-sense investment strategy, including how Lynch categorizes companies. He also describes one of the most important metrics in Lynch’s methodology, the […]

Buffett to Investors: Railroads are Resilient Businesses

In his 2016 letter to Berkshire Hathaway shareholders, Warren Buffett argues that the resilience of the railroad business makes it an attractive investment, writes Validea CEO John Reese in a recent article for TheStreet. Buffett summarizes his faith in the industry, writes Reese, as “justified both by our past experience and by the knowledge that society will forever need huge investment in both transportation and energy.” Using the stock screening models he developed based on the philosophies of some of the most successful investors, Reese identifies the following high-scoring railroad operators and suppliers: Canadian Pacific Railway (CP) owns and operates […]

Buffett and 3G Capital Might Like These Picks

 While the private-equity firm 3G Capital and Buffett’s Berkshire Hathaway have teamed up on a few headline deals (such as the acquisition of H.J. Heinz and the subsequent merger of Heinz and Kraft), their investment portfolios look a little different, writes Validea CEO John Reese in a recent article for The Globe and Mail. The Berkshire portfolio is weighted heavily in stocks of consumer goods and companies (including a big bet on Apple), while 3G’s holdings include a substantial portion of energy, basic materials and telecommunication stocks. There are some overlaps, however. By looking at both portfolios, Reese identified some […]

Buffett Revisited

The Oracle of Omaha is an investment legend whose tireless work ethic and down-to-earth philosophy has helped him grow Berkshire Hathaway into one of the largest companies in the world. In a recent article for Nasdaq, Validea CEO John Reese digs into Buffett’s stock selection method and offers five stocks picks that make the grade under his Buffett-inspired screening model (the first of which are currently in the Berkshire portfolio): Apple Inc. (AAPL),the tech industry behemoth, gets a green light based on its predictable and growing earnings and moderate debt level. The company’s return-on-retained earnings (change in 10-year earnings-per-share divided […]