We have added 2 new strategies to the quantitative strategies section:
The Robot Portfolio
The Robot strategy was suggested by the fund manager and Bloomberg’s columnists, John Dorfman.
Dorfman’s robot portfolio selects the 10 stocks of large profitable and non-leveraged US companies with the lowest Price to Earnings multiplier, holds them for one year, and then replaces them with 10 new robot stocks. You can read a more detailed explanation of the robot strategy in this article.
Since launched in 1999, the robot portfolio has delivered an impressive excess return above the indices.
The robot screening starts by selecting US-traded companies with a market capitalization above $500 million. Now, it takes only those that had positive net profit in the last 12 months and has long-term debt lower than their Equity. Finally, it chooses the 10 cheapest stocks by taking the ones with the lowest price/earnings ratio.
We present all the US companies that pass these criteria (we limit the P/E to 15) and update the list every day, so you can choose your robot stocks whenever you like.
The Robot stock list includes very interesting companies currently, and you’re invited to take a look at this link.
The Acquirer’s Multiple
The Acquirer’s Multiple was originally trademarked by Tobias Carlisle, but it’s actually a well known valuation framework that value investor are using to screen for deeply undervalued stocks that could possibly be activist and takeover targets.
This is done by screening companies by their Enterprise Value (EV) divided by the company operating profit, or earnings before interest and taxes (EBIT).
Acquirer’s Multiple = EV / EBIT
EV is the true cost that you have to pay in order to acquire the company, and it is calculated by adding the Total Debt to the market capitalization of the company and deducting its cash and Equivalents.
EV = Enterprise Value = Market Capitalization + Debt – Cash
We present all the US companies that have EV/EBIT lower than 15.
The most efficient way to implement the strategy is to buy a basket of 20-30 of the lowest Acquirer’s Multiple stocks at an equal amount of money and sell each stock after 1 year, replacing it with new stock from the updated list.
Join hundreds of investors that are already using the LongRunPlan Premium plan and view the attractive Acquirer’s Multiple stocks from this link.