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Old School Value Nugget Fest (May 30th Edition)

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  • Our Systematic Value Philosophy (Flirting with Models) My favorite article this week.
  • It looks at different value factors as well as uncompensated risks value investors face like industry concentration and timing and tries to construct a portfolio that’s neutral to all that noise.
  • Precious Metals Investing: GLD vs GDX (Fat Tailed and Happy) “Precious metals investing in GLD would have received nearly a 100% return on investment from 2006.

The SMID-Cap Universe Provides Greater Opportunities Over Large And Small Caps – Here’s Why

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  • During his recent interview with Tobias, Ben Claremon, the Principal and Portfolio Manager at Cove Street Capital outlines the reasons why he believes the SMID-Cap Universe provides greater opportunities over Large and Small Caps.
  • But the data’s interesting, and so let me give you the philosophy and then I can give you some anecdotes that I think will kind of crystallize why not necessarily our smid strategy, but any smid strategy can be interesting.

TAM Stock Screener – Stocks Appearing in Greenblatt, Rogers, Gabelli Portfolios

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  • Part of the weekly research here at The Acquirer’s Multiple features some of the top picks from our Stock Screeners and some top investors who are holding these same picks in their portfolios.
  • (BorgWarner Inc NYSE: BWA)
  • Joel Greenblatt – 454,697 total shares

Buy And Verify

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  • When you know a company really well you can almost feel the pulse of the company.
  • There have been several occasions where I did the work and could feel the pulse of the company change for the worse but didn’t sell.
  • Ian’s belief is the key to outsized returns is finding great companies early because all great companies started as small companies.

5 Tech Stocks With A History of Growing Their Dividends

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When you hear the words "tech stocks", many investors think back to the tech bubble in the late 90s. A tech company's goal back then was to plow back every penny into the business for sustained grow. The entire focus was on capital gains. During this era companies that paid dividends were looked down on as inferior.

Investing and the Art of Due Diligence

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  • And in the case you lay out, the first question you have to ask is, do I understand enough about thus business so that the financial statements can tell me the information that is useful to me to make a judgement about what the future financial statements are going to look like?
  • Buffett: It’s a lot easier to understand a business that’s bringing you a check every month…But I bought a lot of things off of financial statements.

Is Investing About Luck? Or Why Dividend Growth Kicks Ass Against All Odds

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  • I shifted my entire portfolio toward a dividend growth investing strategy (explained through 7 investing rules ) between 2010 and 2012.
  • Now, I’m not comparing Plan A with index investing and Plan B with dividend growth investing.
  • However, I do think you will do better investing in dividend growth stocks.

“Farmer Mac” A.K.A. Federal Agricultural Mortgage Corporation (AGM): The Freddie Mac of Farms and Ranches Has a P/E Below 9 and an ROE Above Most Banks

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  • Last year, Farmer Mac’s total interest expense was less than 2.1% of its average assets.
  • So, if Farmer Mac could make a 0.5% after-tax return on its assets – what would you, the common stock holder, earn on your equity?
  • This implies your return in the stock should be 15%/1.5 = 10% a year.

Barron’s: Corteva Is Nice But Go For FMC Instead

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  • The upcoming spinoff of Corteva Agrisciences on June 1st is the final step of DowDupont’s (DWDP) breakup.
  • You may have heard us talk about it once or twice or…it’s not important.
  • As a reminder though, Corteva will trade under the ticker ‘CTVA’ and DWDP shareholders should receive 1 share of CTVA stock for every 3 DWDP shares owned.… Read More »

Investors Should Spend More Time Focusing On The Culture Of The Business Behind The Stock

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  • And so, if I have to encapsulate it, long term focus people who are creating cultures that can last, and a lot of that can be reflected, and this is something else we do, we look at Glassdoor and Indeed.com to see how people are rated, right?
  • Just because it’s hard to quantify doesn’t mean you can ignore it, and so what we try to do is we try to create a list of things we’re not looking for, try to create a list of things we are looking for, and have a checklist of those things.

Michael Burry – Top 10 Holdings Q12019

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  • These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions.
  • We spend a lot of time here at The Acquirer’s Multiple digging through these 13F-HR documents to find out which superinvestors hold positions in the stocks listed in our Stock Screeners .
  • This week we’ll take a look at Michael Burry (2019‑3‑31).

How Google Kills the NY Times

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  • On the Trade Desk ( TTD ) conference call earlier this month , the first analyst question highlighted the upcoming changes to Google Chrome and asked about the effects they may have on the ability of advertisers who use cookies to track and target visitors.
  • Apple has already made similar changes, as CEO Jeffrey Green explains:

More cash parking options

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  • I’ve written a lot about some cash parking options – whether they are short-term bond ETFs, or short-duration target-maturity ETFs.
  • Interactive Brokers currently gives out 111bps on Canadian cash, but there are higher yielding options with less risk.
  • They give out a net yield of about 2% (215bps minus 15bps expenses) with zero duration risk, and this is paid out monthly.

Inversion of the Canadian yield curve

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  • Canadian government bond yields:
  • This would be one explanation why those 5-year rate reset preferred shares aren’t doing so good price-wise.
  • The 5-year yield also dropped under 1% between June 2015 to October 2016 – these were not happy times for rate resets.

Atlantic Power – selling a power plant

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  • Atlantic Power (TSX: ATP ) today announced they are selling their largest power producing plant (Manchief) on May 2022 for $45.2 million.
  • In the meantime, Manchief will continue operating and contributing cash – in 2018, the cash generated from Manchief was 12.2 million (and indeed this number was somewhat lower than it could be given there was a turbine installation performed in 2018).

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