Values and Valuation website. All Rights Reserved. Protected by copyright laws of the United States. The information provided is solely for informational purposes and does not constitute an offer to buy/sell any securities. All securities investments carry risk, including a risk of loss of principal. Investments may be volatile and can involve the loss of principal. Values and Valuation website is not a registered investment adviser and does not give individualized investor advice. The information resulting from the use of tools or other information on this internet site should not be construed, in any manner whatsoever as a recommendation to buy or sell an investment, nor as the receipt of, or a substitute for, personalized individualized advice and Values and Valuation website takes no responsibility for any investment decisions made as a result of reviewing the information contained herein at valuesandvaluation.com. Past performance is not a guarantee, nor is it always indicative of future results. Entities including but not limited to Values and Valuation website, its members and officers may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take opposing positions. This content of the website ValuesandValuation.com is property of Values and Valuation website. ©2013 Values and Valuation website.
Equity Models Based Upon O'Shaughnessy's Methods
Values and Valuation runs two model portfolios both based upon the work of James O'Shaugnessy's equity selection screens. The classic model is based upon O'Shaugnessy's Cornerstone Value approach and the aggressive model is based upon O'Shaugnessy's Cornerstone Growth approach. His insight was to popularize equity selection screens that combined value with momentum or relative performance strength - often investors would use strategies that employed only value or only momentum approaches.
In back testing the aggressive model returned 430% since 1999 with an annualized return of 12% and the classic model returned 378% with an annualized return of 11%. The classic model however carried a substantially higher dividend yield.
High Owner's Earnings (FCF) Yield Portfolio
The HOE/FCF Yield Portfolio is based upon valuation methods popularized by Joe Ponzio in the book F Wall Street. It looks at the cash yield of the company (average free cash flow over past years compared to entire market capitalization) as well as a margin of safety based upon DCF valuation.