roughlyright Posted July 15, 2013 Share Posted July 15, 2013 I was reading this post on CFA Institute website, which claims that negative enterprise value stocks are a great investments. Can anyone recommend a good screening website or a method to find these stocks? http://blogs.cfainstitute.org/insideinvesting/2013/07/10/returns-on-negative-enterprise-value-stocks-money-for-nothing/ Link to comment Share on other sites More sharing options...
matjone Posted July 15, 2013 Share Posted July 15, 2013 stockscreen123 & ft.com Link to comment Share on other sites More sharing options...
blainehodder Posted July 15, 2013 Share Posted July 15, 2013 oldschoolvalue has some great value screeners including a neg EV screen: http://www.oldschoolvalue.com/stock-screener.php ...Also, here are some things to think about when it comes to neg EV stocks. The most important thing is to be aware of off balance sheet liabilities such as lease obligations. http://aswathdamodaran.blogspot.ca/2008/12/entperise-value-is-negative-is-that.html Link to comment Share on other sites More sharing options...
NormR Posted July 15, 2013 Share Posted July 15, 2013 Also, be warned that the reported returns to the strategy are likely somewhat overstated. (I still think it's a very interesting area.) Small cap work often runs into real trouble re: bid/ask spreads, data quality issues, survivorship bias, etc. But I hope Alon Bochman keeps working on what is an interesting area of research. :) Link to comment Share on other sites More sharing options...
bobp Posted July 16, 2013 Share Posted July 16, 2013 http://finviz.com/screener.ashx Finviz is the best free screener I've found. You can join and save your screens. On the line that says: Filters - Descriptive, fundamental,technical.. ..Click on "all" and you can put together all the criteria you'll want Link to comment Share on other sites More sharing options...
oddballstocks Posted July 16, 2013 Share Posted July 16, 2013 I do a lot of negative EV type investing, seeing this research confirmed that I was on the right path. I've used FT.com to find a lot of these companies, I'll checkout finviz.com as well. Norm is right, there are a lot of issues with these things, especially data quality. There are some great negative EV stocks that never appear on screens. Then some that appear on screens have the off balance sheet issue. I'm not sure this is as easy as buying a screen and sitting back, but it's a great starting point. Link to comment Share on other sites More sharing options...
blainehodder Posted July 16, 2013 Share Posted July 16, 2013 I've done a bit of this pure cash arb stuff as well. Pretty similar to the standard net-net stuff in my opinion. I'd say on the average neg EV Im doing much worse than 50%, but overall it seems to be working out. Any investable neg EVs on your list right now Nate? By investable, I mean no obvious red flags such as mega cash burn, or likely fraud. Link to comment Share on other sites More sharing options...
roughlyright Posted July 16, 2013 Author Share Posted July 16, 2013 Thank you blainehodder, matjone and BobP for the links. I really liked the Finviz stock screener. Oddballstocks, I am a big fan of your blog. Do you have any on your radar that have negative EV? Link to comment Share on other sites More sharing options...
oddballstocks Posted July 16, 2013 Share Posted July 16, 2013 I've done a bit of this pure cash arb stuff as well. Pretty similar to the standard net-net stuff in my opinion. I'd say on the average neg EV Im doing much worse than 50%, but overall it seems to be working out. Any investable neg EVs on your list right now Nate? By investable, I mean no obvious red flags such as mega cash burn, or likely fraud. Agreed, it's similar to net-nets. I ran a screen when this article came out, from what I saw 99% of the companies in the US were China frauds or companies with managements blatently stealing from shareholders. There was some interesting looking stuff overseas. I need to look for a few more of these. Link to comment Share on other sites More sharing options...
oddballstocks Posted July 16, 2013 Share Posted July 16, 2013 Thank you blainehodder, matjone and BobP for the links. I really liked the Finviz stock screener. Oddballstocks, I am a big fan of your blog. Do you have any on your radar that have negative EV? Nothing particularly on my radar, I was going to do a writeup of Titanium Holdings soon, that's a negative EV stock, maybe worth a look. Link to comment Share on other sites More sharing options...
Palantir Posted July 16, 2013 Share Posted July 16, 2013 Just found Emerson Radio (MSN) that meets req's. Link to comment Share on other sites More sharing options...
bobp Posted July 16, 2013 Share Posted July 16, 2013 Just found Emerson Radio (MSN) that meets req's. There's some questions about msn. It may be entirely legitimate but it smelled pretty funky to me. Here's one article. http://www.gurufocus.com/news/172206/a-stock-where-neither-the-business-nor-the-price-matters Link to comment Share on other sites More sharing options...
oddballstocks Posted July 16, 2013 Share Posted July 16, 2013 Just found Emerson Radio (MSN) that meets req's. There's some questions about msn. It may be entirely legitimate but it smelled pretty funky to me. Here's one article. http://www.gurufocus.com/news/172206/a-stock-where-neither-the-business-nor-the-price-matters This is why I don't blindly invest in US net-nets or negative EV stocks....MSN is one among many. Link to comment Share on other sites More sharing options...
Packer16 Posted July 17, 2013 Share Posted July 17, 2013 A valuation based screen that has performed well has been the AAII Shadow Portfolio. This is an actual portfolio so doesn't have the theoretical issues of other screen-based performance measures. It has outperformed by 9.0% per year since inception in 1993. Over the past 10-years it has outperformed by 12.5% per year. Another interesting question is has anyone tried to value weight any of these screened portfolios to enhance performance? Packer Link to comment Share on other sites More sharing options...
blainehodder Posted July 17, 2013 Share Posted July 17, 2013 A valuation based screen that has performed well has been the AAII Shadow Portfolio. This is an actual portfolio so doesn't have the theoretical issues of other screen-based performance measures. It has outperformed by 9.0% per year since inception in 1993. Over the past 10-years it has outperformed by 12.5% per year. Another interesting question is has anyone tried to value weight any of these screened portfolios to enhance performance? Packer It is kind of funny because value weighting will surely demonstrate increased performance, but it will be even less realistic as the best values are the most illiquid. Link to comment Share on other sites More sharing options...
Packer16 Posted July 17, 2013 Share Posted July 17, 2013 It depends. Sometime the cheapest are not the less liquid. The nice thing about the AAII portfolio is they screen out low tradins stocks. Packer Link to comment Share on other sites More sharing options...
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