web analytics

Market Valuation Analysis – Take advantage of opportunities that are now available in the marketplace

March 13, 2020

Applied Finance has aggregated recent performance over the last several weeks to help fully understand the recent market drop’s impact through various sector, style, factor, and industry lenses. We have also compiled updated percent to target median charts to better understand current valuation levels normalized against historic averages. We present this data today with limited commentary, as we will explore this in much more detail in next month’s quarterly write-up. In the meantime, a few main observations […more]

Valuation Dividend – Q4 2019 Quarterly Review

January 21, 2020

VALUATION DIVIDEND QUARTERLY REPORT: Q4 2019 Valuation Dividend™ returned 6.52% in 19Q4, vs. 7.41% for its benchmark Russell 1000 Value, on a total return basis. In 2019, the Valuation Dividend returned 24.92%, below the R1000 […more]

Reclaiming Value & Restoring its Place in Active Management

January 15, 2020

The insights delivered by this study are truly fascinating.  On one hand, the evidence that price multiples are incomplete in forming a definition of value is obvious, and this should align with intuition.  If broader market participants heed this advice, this study will have been a noble effort to improve the flow of accounting information and analyst forecasts into market prices.  On the other hand, there has never been obvious justification for measures of cheapness to define value in the first place.  Many investors simply use these factors out of convenience or tradition, while many others invest in products built upon them with little understanding of the classification error they introduce.  […more]

Looking Backward and Forward Q4 2019

January 7, 2020

2019 was a triumphant year for the US large cap equity market, with the S&P500 index up 31% on a total return basis. The resolution of two major concerns in the year, namely the US […more]

Valuation vs. cheapness Investing

November 12, 2019

Despite decades of academics and practitioners promoting the ”value factor”1, it generates marginal to no long-term alpha. We believe four reasons have contributed to slow the discovery process from the current accepted “value” regime (low price to something) towards a more robust and realistic true value regime (worth measured independent of market price and focused on the value of future cash flows).
1. No theory.  There is no clear link between commonly used “value” variables and true value.  Yet academics and practitioners have developed no viably accepted competing perspective to explain future returns […more]

Faster And Cheaper Aren’t Always Better

October 9, 2019

100 mph pitchers are a rare and treasured commodity, simply because they have been among baseballs’ most effective players. The mention of Randy Johnson, Nolan Ryan, JR Richardson, Bob Feller, all elicit reverence for their amazing careers. Yet what of Steve Dalkowski who Ted Williams once faced off against and said – I could not see the ball […more]

Value Versus Cheapness: Same, Same, But Different

July 10, 2019

Cheapness has existed as an investment concept forever, but it became institutionalized with the Fama/French’s 1993 three factor model. Cheapness has never been the same as hundreds of billions was poured into equity investment strategies focused on buying “low price to something” stocks supported by reams of back test data. In addition, thousands of small investment professionals and amateurs replicate much of the process the large firms employ via access to abundant datasets on Yahoo! Finance […more]

The Gross Profitability Trap

July 8, 2019

The Gross Profitability Trap “But this time, it’s different!” More foolish words are rarely spoken in the financial industry, but they always seem to find their way back into the stock market lexicon. A firm’s […more]

Valuation Dividend – Quarterly Report Q1 2019

April 24, 2019

The memories are still fresh that the US large cap equity market lost more than 10% of its value in Q4 of 2018, with ~9% alone in December. Barely did investors have a chance to regroup, and the Russell 1000 index rose 8.4% in January and closed 19Q1 14% higher. The Fed that turned dovish was the prime catalyst behind the US equity market rally. On January 4, Fed Chairman Powell indicated inflation was muted and the central bank would be in no hurry to raise rates, leading the R1000 […more]

1 6 7 8 9

ValuationEdge™ Newsletter

Join to receive updates and exclusive

Valuation Driven® insights!

You have Successfully Subscribed!