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

To: bruwin who wrote (4418)	5/23/2020 10:23:52 AM
From: E_K_S	Read Replies (1) \| Respond to of 4719

Those scans are a good first look and do not take too much effort. I do the same w/ the GN valuation calculator. I have yet to find a good and extensive stock screener but remember every other hedge fund value investor is/are doing the same fundamental screens. I do like Guru.com. I review where the so called 'smart' investors are putting their money. The items that one can not really screen are: (1) managements effectiveness (2) investment into the future that obtain results (you can look at R&D and acquisitions). When I put together my notes on a company to create my 'company story', I look at new and past acquisitions and if/when new management was hired. Results typically start to appear after 18 months and even longer. The Fundamental Investor must glean all information, facts/figures that can be quantified and other data/news points that can be inferred and then make a decision if the company fits their 'fundamental' value investment criteria. In the past, I have missed a lot of High Tech's innovation w/ too constrictive 'value' metrics so here's my attempt to expand that w/o moving my value needle too far (loading up on penny stocks). -------------------------------------------------------------- I would like to find a few more names in the High Tech sector that are innovators but still have a durable 'moat', have growing earnings and pay a dividend. INTC & MSFT were ones I have owned in the past. INTC may still pass my value screen. Still hunting for the next innovator at a good value price. EKS

To: bruwin who wrote (4418)

5/23/2020 10:30:54 AM

From: Sergio H

Read Replies (1) | Respond to of 4719

Amazon traded as a public company for 14 years without making a profit. For the most part, share price rose. Even today while it is profitable, it trades at ridiculous multiples. I am seeing some OTC stocks as opportunities that were present in the 90s in high growth Nasdaq stocks like AMZN, MSFT, CSCO, etc. They were considered high risk as OTC is considered now. OTC has done an excellent job in monitoring and compliance. I did a write up on the different markets and investor safety which can be found here: seekingalpha.com

Below is an illustration of how fast these companies are growing relative to the dilution created by issuing shares to fund acquisitions. It's simple to calculate that if they stop acquiring companies they would be profitable but they are scaling their business, similarly to Amazon's game plan.
The first step to review is if revenues are growing faster than share count. Then the next step is are growth margins and recurring revenue growing. I didn't do the latter because it's not always a straight stairway to heaven and I only looked at one year. These OTC stocks do not have a long history of being a commercial enterprise so it is also very important to look at the history of the management team and I like skin in the game as well.
As EKS noted, eventually these companies get acquired by bigger fish who operate in the same sector who want to beef up their earnings and margins.

	REV 2019	REV 2018	CHANGE	SHARES 2019	SHARES 2018	CHANGE
MCLDF	6.6	1.3	76%	10	7	30%
VQ	11.5	25.1	136%	10	9	10%
EM	17,963	18,372	2%	616	621	0