Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (43158)	7/3/2011 1:15:19 PM
From: Spekulatius	Read Replies (3) \| Respond to of 78732

The problem with the Magic formula screen is that it only looks at backward data by design. The underlying assumption is that companies that have shown a good cash yield in the past, have a strong business and the stock will come back (to get into the screen they have to get cheap first). Now you need to ask yourself, why a stock went down to begin with - in most cases there will be good reasons. The market pays for future earnings, not the past ones. Speaking of the Magicformula screen - anybody looked at PWER? Volatile business but the stock sure looks cheap.

To: E_K_S who wrote (43158)	7/3/2011 2:05:37 PM
From: Jurgis Bekepuris	Respond to of 78732

OSK - what's not to see? Current ROE ~20, ROIC ~15, earnings / EV somewhere at 9%, P/S 0.4. And I am looking at 2011 H1 results and not 2010 that were much higher (one time?). Sure, results are lumpy, ~70% of sales is military and ~90% US, so there is a risk of big military/govt purchase drop, but I assume Icahn may be looking longer term.