Investment Strategy Today
Fourteen stocks added to Buy Consideration list today. All of these stocks have:
1. Moved into UnderValue,
2. Made a meaningful move back to fair value
3. Ranked in upper 1/3 for revenue growth over 5,3 and 1 yr or made a significant 1 yr improvement in revenue growth
4. Ranked in upper 1/3 in profitability measured by EDIT, EBITDA, Free Cash Flow/share.
5. Ranked 3 or better in World 10 factor measurement
6. Ranked 3 or better in EPS factor measurement
7. Ranked 2 or better in ISN combined ranking
Investment Strategy Today
Johnson Controls receives a Fair Value increase. Most considerations move toward the center (HOLD) as the markets continue to adjust relative fair value against expectations.
Acquisition: IBM Acquires Red Hat
IBM an Undervalued stock at 74.6% Fv agreed to acquire a previously Overvalued stock that recently dropped from 160% Fv to 110% Fv. At the announcement, Red Hat instantly returned to 160% Fv or over $172/share. IBM’s offer of $190/share represents a 77.6% premium over fair value.
Merger Consideration Brief (November 2018)
Currently, 20.1% of the overall market has an elevated probability of being involved in some level of merger, acquisition or breakup activity. This is a 0.1 point drop over the previous report in August. Approximately, 58% of the activity is expected in SmallCap alone, the remaining activity is expected in MidCap at 23% and LargeCap at 19%.
USA Stock Considerations Report
Over the past 12 months there have been considerable changes taking place in stock consideration classifications. The most significant changes have taken place in the last 14 days.
Stocks trading in their normal Fair Value range, HOLD, has dropped from 66% to 53%. Roughly half of the total market is trading in their Fair Value range at the present time. Over the past 24 months the shift was from HOLD to SELL WATCH / SELL. This was occurring as investor expectations increased thereby pushing stocks above their Fair Value range. Over the past 14 days stocks have been moving from HOLD into BUY WATCH and
BUY. BUY WATCH has increased 9 percentage points to 10% of the total market. BUY has grown 4 points from 11% to 15%.