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About Applied Finance
Applied Finance, a thought leader in valuation and portfolio construction, is a true “value” investment management company.  Unlike the majority of firms today that focus on low multiples to define “value”, we define value as identifying companies trading below their intrinsic value.  Our Valuation Driven™ approach forms the foundation of our investment decisions...more

Common Sense Not Drama

April 10, 2019 Applied Finance

With Q1’19 behind us, we were again reminded why most strategies which trade in and out of the market are nothing more than a Siren call luring a portfolio to crash on the rocks of chasing returns. Much better to be Odysseus and put wax plugs into your ears and focus on the long term to avoid buying high and selling low as volatility trashes your sense of normality. After Q4’18, few people had much appetite for equities, thinking only bad news would prevail in the year ahead. Yet, by the end of Q1’19, US equity markets were up double digits. […more]

Intrinsic Value Factor™

February 4, 2019 Applied Finance

Valuation Driven™ Investing begins and ends with calculating the intrinsic value of every stock in a benchmark against which a portfolio is constructed, and comparing those values against traded prices. All of Applied Finance’s portfolios are Intrinsic Value Driven™, which differs significantly from a “value” perspective. To gain a better understanding into Applied Finance’s Intrinsic Value Driven™ approach, let’s first review traditional approaches to “Value”.

The traditional approaches to finding undervalued stocks use a simple ratio such as P/E or P/B, or a mix of them. These common approaches to value come with many shortcomings: […more]

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