John Neff’s Screen Results
John Neff, turns out, is a lot like me. Likes buying quality companies when they’re undervalued and out of favor. Makes sense to me. So he had a method/equation he used to find investable companies. If Total Return (earnings growth + dividend yield) divided by the price to earnings ratio was at least 2:1, he took interest. Using numbers provided by Simply Wall Street, here is a list of quality companies whose growth + yield are more than 2x the current P/E ratio. All are profitable and relatively stable, out of favor and relatively cheap. Obviously, do your own research. I just want to share some of the results to offer up new ideas to anyone looking to spread their wings.
Here are the results, I do own some of these FYI.
I share my portfolio, but to save anyone time, I currently own $MATX , $WIRE , $BCC , $MDC , and held $LU is the past, but it appreciated like 30% in a week immediately after I bought it (100% luck to happen that quickly), that’s a sell in my book. Gotta remember to not be greedy, pigs get slaughtered. If I can make 20%-30% in a month, I’ll take it and move on. Too many opportunities to make money to be in love with any stock.
I hope that provides some new companies for a few value investors. Enjoy!
Remember, if you like charts, you’ll hate most of these stocks😉I go against the crowds momentum, hence the success.
On a side note, $MATX & $WIRE are showing up on lots of my different quality screens. Those are the two you may want to evaluate first😉
Let me know what you like or hate, be sharing one a week for a while.
PS: I mentioned I use ZERO forward looking anything; however, to build Neff’s screen, I had to use 12 month FWD earnings estimates to estimate total return. I reduced analyst earnings estimates by 10% to increase my margin of safety further and ensure estimates were conservative. This will be the ONLY time forward looking anything will be used in a post of mine🤙
Irrational Behavior=ROI
As plenty of you know, I’m long $COIN. Recently they fell double digit % 3 consecutive days. As I mentioned daily that I was adding to my position, I reiterated around $55, that the more irrational the price movement, the more comfortable I felt pushing all my chips in (to any swing trade/contrarian play). Now, close to $70, that’s a pretty nice 2-3 day come up. $FB was the same recently, falling 25% overnight (irrational af) generating ~30% ROI over the next 2 calendar weeks. I try to be a buy and hold type, but sometimes the opportunities are too easy to pass up. I didn’t take advantage of the Coinbase bounce because I’m much more confident in longer term growth. I did add higher dollar amounts as it fell lower though. Added much more at $55 than I had at $80 or $100. I also did similar trades with $LU & $BABA recently, earning 20%-30% in less than 30 days. I can’t define “irrational” for others. It’s more of a mental model that I’ve developed to shortcut the analytical process. Requires a deep understanding of valuation and behavioral finance to execute confidently, and a lack of greed, but it works like a charm tho.
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