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

To: E_K_S who wrote (55009)	3/6/2015 3:25:11 AM
From: bruwin	Read Replies (2) \| Respond to of 78717

" ... over the past four months the F-Score portfolio has returned negative 21.6%." Is this the case of the ‘Market Value’ (i.e. related to current share price) being lower than the ‘Book Cost’ (i.e. related to the Book Value per share) which should result in the “Market’s conclusion” that the Market Value should move up to better equate with the Book Value and that therefore a buy at the current price should result in a future Capital Gain ? Should be interesting to see how many of those, apparently, “undervalued” stocks show an increase in their share prices in the future. Maybe an idea to take a leaf out of Buffett’s preference where one compares a company’s share price to the ratio of its Pretax Earnings per share/Long Term Corporate Bond Rate. IMO you’re probably more likely to score, in the medium to long term, if its share price is currently lower than the determination of that ratio.

To: E_K_S who wrote (55009)	3/6/2015 10:40:15 AM
From: MCsweet	Read Replies (2) \| Respond to of 78717

Piotroski, here is my final take on it: Purpose (taken from article #1) The F-Score was designed to hunt out value opportunities that are profit-making, have improving margins, don't employ any accounting tricks and have strengthening balance sheets. When you know for a fact that steel and oil companies going forward won't have improving margin and strengthening balance sheets due to low commodity prices, I think buying them because they have a good historical F-score is silly. I put faith in the screen, but you have to understand the purpose of the screen and apply a little common sense IMO. Thus, I use F-score for companies where I don't have any reason to expect deteriorating performance. I try not overthink things and override my screens, but it seems obvious to me in this case that the original screen purpose is not being met. This has worked pretty well for me over time. I think screens still should be used to consider energy companies, but they should be focused on which ones are good values and are likely to be succeed in a low energy price environment. MC

To: E_K_S who wrote (55009)	3/9/2015 11:59:45 AM
From: MCsweet	Read Replies (1) \| Respond to of 78717

By the way, my latest Piotroski screen has the following BHE, CHK, EPE, WILC, LBIX, MXC, NOG, SPAR, ULTR I like and own BHE. It has a nice chunk of cash. Earnings are ok. Share count is decreasing. And for once it is not a roach motel stock (trading volume is good). That being said, I haven't done a deep deep dive on it. Trying not to overthink things, I think smaller positions in WILC, LBIX, SPAR are appropriate. I've owned WILC and LBIX on and off for awhile now. The other ones are all oil stocks, so per my prior reasoning I have not bought them. MC