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

To: E_K_S who wrote (55301)	5/9/2015 1:04:17 PM
From: Shane M	Read Replies (1) \| Respond to of 78705

E_K_S, It's interesting you mention that post about reversal potential. I was thinking just a couple days ago about updating that study again. I have invested in QSII in the past (prior to the post mentioned), but I didn't like what I was seeing when I looked at them last year. The reversal/turnaround situations are difficult for me to see through because the trouble is what creates the opportunity, but I remember not having a favorable impression of potential for QSII turnaround when I looked into it back then, particularly some discussion comparing their system usability to competitors. That said, I might need to look at it again. It's been about 14 months or so. If they can get their margins back they should do well. I really regret selling my CHRW (as mentioned in the post) as their business turned around not long after that. I'm actually thinking of getting back in CHRW again - I'm drawn to the business.

To: E_K_S who wrote (55301)

5/9/2015 3:18:13 PM

From: Shane M

Respond to of 78705

E_K_S,

Your link to that older post of got me to thinking that it'd be interesting to look at the performance of those potential turnaround/reversal type situations. It was a new approach to attempt to find companies with history of desirable business in past, are underperforming relatively at current time, but are companies that could do well if business returns more to what historicals might suggest. At it's core it's a mean-reversion idea.

So here's a performance summary of the companies mentioned on the post, along with yahoo adjusted price quotes on day of the post 2/13/2014 and compares to quote from yesterday. Just looking at it it seems like the approach might have some potential, but not totally sure how it looks from risk adjusted basis or how it'd be on the "gut" in real time. I really like that 9 were up and 4 were down in the interim. Reversion to mean seemed to be in play, and just from looking at the list I think holding a basket would've been acceptable, although there's a couple of portfolio killers in there with CLF and APEI. There was no recession also which probably helps struggling companies more than strong companies. Anyhow, here's the individual list.

ticker	2/13/2014	5/8/2015	% chg
SPLS - Staples	12.50	16.51	32%
BIG - Big Lots	26.15	47.99	84%
EXC - Excelon	28.37	33.93	20%
DGX - Quest Diagnostics	50.85	71.02	40%
LH - Labcorp	91.81	118.40	29%
DV - Devry	35.88	31.52	-12%
APEI - Amer Publ Ed	43.15	27.79	-36%
POT - Potash	31.78	32.32	2%
CLF - Cliffs	21.07	6.09	-71%
QSII - Quality Sys	17.22	15.52	-10%
LHCG - LHC grp	24.08	34.25	42%
EXPD - Expeditors	41.19	48.06	17%
CHRW - CH Robinson	52.53	65.70	25%

Avg equal wt			12%
Median			20%

SP500 (^GSPC)	1829.83	2116.1	5%
Russell 2000 (^RUT)	1147.79	1234.93	15%

In total it seems like it might be a useful approach, although the sample is small, and I can't remember to what degree subjective criteria entered into things when list was put together.... going back to look through the spreadsheet to help refresh myself.

To: E_K_S who wrote (55301)	5/30/2015 11:21:58 AM
From: E_K_S	Read Replies (1) \| Respond to of 78705

Re: Quality Systems Inc. (NASDAQ: QSII - Started small position @ $15.84/share Ampco-Pittsburgh Corp. (NYSE: AP) - Added to my small position @ $15.75/share (Note: HedgeMind.com is a new site that shows the major holdings of large hedge Fund investors) I started a new positions in QSII and added shares to my AP holdings. AP is a value play and QSII is a GARP play. Both pay a 4% dividend. Value investor Joel Greenblatt bought more QSII in 3/2015 at/around $16.00/share. Below you will notice that Mario Gabelli is a large holder (a value 'activist' investor) in Ampco-Pittsburgh Corp. (AP). He is in his position at/around $19.00/share. AP has a BV of 19.67/share according to Yahoo Finance. My avg cost now is around $16.00/share. EKS