Joel Greenblatt

Joel Greenblatt

Last Update: 2014-05-15

Number of Stocks: 994
Number of New Stocks: 229

Total Value: $6,641 Mil
Q/Q Turnover: 52%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Joel Greenblatt Watch

  • To Bite or Not To Bite: That´s Luis Suarez and Adidas´ Question

    In this article, let´s look at Adidas AG (ADDYY), the German multinational corporation that designs and manufactures sports shoes, clothing and accessories based in Herzogenaurach, Bavaria, which spent approximately $70M to sponsor the FIFA World Cup Brazil 2014.


    Adidas logo is prominently displayed throughout the World Cup and is also the official ball provider “The Brazuca”.

      


  • Greenblatt Discloses Three of His Short Holdings

    In an interview on CNBC last Thursday, Joel Greenblatt (Trades, Portfolio), Columbia professor and CIO of Gotham Asset Management, briefly discussed his strategy. Many people are aware of his Magic Formula strategy from his book, “The Little Book that Beats the Market.” The Magic Formula is designed to give the retail investor a simple investing strategy to follow. It is based on buying companies with high returns on capital (ROC) and earnings yields and rebalancing once a year. For the three long/short funds that he manages at Gotham Asset Management, he has a higher level of scrutiny in his investments. According to an interview with Morningstar in October, it took his team six to seven years to research all of the largest companies and be able to update them on a quarterly basis as new information comes out. His research involves going through every balance sheet, income statement, and cash flow statement and making adjustments from what the companies are reporting and what the economic reality is.


    His strategy as described in the interview includes looking at the largest 2,000 companies in the U.S. and ranking them based on their discount to their assessment of value. He buys the 300 cheapest stocks and shorts the 300 most expensive stocks. His long portfolio can be followed at GuruFocus (Joel Greenblatt – Stock Picks). The difficulty is finding the stocks that he is short since they are not required to be disclosed. On CNBC he listed off three of them: Stratasys Ltd. (SSYS), Carnival Corp (CCL) and Salesforce.com Inc. (CRM). He says that these companies are eating through cash and destroying capital as they invest.

      


  • Joel Greenblatt’s Forgotten Original Magic Formula

    Did you know that long before Magic Formula investing went mainstream, Joel Greenblatt (Trades, Portfolio) was developing and testing an even more powerful investment technique?

    Joel Greenblatt (Trades, Portfolio): A Beautiful (Investment) Mind

      


  • Weekly Three-Year Low Highlights: LULU, BLOX, RNF, BEBE

    According to GuruFocus list of three-year lows, Lululemon Athletica Inc., Infoblox Inc., Rentech Nitrogen Partners LP, and bebe Stores Inc. have all reached their three-year lows.


    Lululemon Athletica Inc. (LULU) Reached the Three-Year Low of $43.16

      


  • NEW SITE FEATURE: 10-Year Median Scans

    GuruFocus has always delievered the most vast offering of equity research tools available on the market. Last year we introduced the All-In-One Guru Screener. It has been met with immensely positive feedback and has quickly become the go-to scanner for sophisticated investors.


    To further improve its fundamental search capabilities, we have added 10-year median options to several of the scan metrics. Return on Assets (ROA), Return on Equity (ROE) and Joel Greenblatt (Trades, Portfolio)’s Return on Capital (ROC) have been existing features since inception. The easy-to-use drop down menus allow users to select minimum and/or maximum values by which to filter a list of qualifying securities.

      


  • Importance of ROIC Part 1: Compounders and Cheap Stocks

    A while back, I posted a couple articles on return on invested capital (ROIC) along with some comments on Joel Greenblatt (Trades, Portfolio)’s Magic Formula. These posts attracted a lot of comments and email questions, so I wanted to post some more thoughts on the topic of compounding generally, and maybe ROIC more specifically. Here are some links to posts that are somewhat related to this topic:




  • Joel Greenblatt's Gotham Capital Top 5 New Stocks

    Joel Greenblatt (Trades, Portfolio) is the developer of the famous investing strategy for the everyday person, the “Magic Formula.” He also along with a partner manages a hedge fund called Gotham Funds. The stock selection process at the fund involves valuing all U.S. large and mid-cap companies, then taking positions in those trading at the greatest discounts and shorting the most overvalued, controlling for risk. They describe their views as follows:

    “We believe that although stock prices often react to emotion over the short term, they generally trade toward fair value over the long term. Therefore, if we are good at identifying mispriced businesses (a share of stock represents a percentage ownership stake in a business), the market will agree with us...eventually. For an individual stock selection, we believe the waiting period for the market to get it “right” is no more than 2 or 3 years in the vast majority of cases. For a portfolio of stocks, we believe the average waiting period can often be much shorter.”  


  • Caesars Isn’t Giving Up, but Is It Enough to Turn Profits Around?

    In the last article I wrote about Caesars Entertainment Corp (CZR), I pointed out that the company’s profits haves declined significantly, due to several factors like the licensing proliferation in the U.S. and the 2009 recession, which resulted in strong revenue declines throughout 2012. Furthermore, I was bearish about the casino’s ability to regain its financial strength, given its lack of free cash flow and immense debt load. With investment gurus like Paul Tudor Jones (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) selling out or reducing their shares in the company, it seems as though not much has changed in the past months. But let’s take a look at the Apollo Global Management LLC (APO) controlled casino operator and see if there might be an upside anytime soon.


    Is a New Acquisition Really a Good Idea?

      


  • Technological Innovation Will Ensure a Profitable Future for This Auto Parts Supplier

    With safety regulations getting stricter for automotive manufacturers, auto-parts suppliers which manufacture safety automotive systems and components are avid to gain profit from this context. This is the case of multibillion dollar auto-parts manufacturer TRW Automotive Holdings Corp (TRW). The company focuses on designing, and manufacturing active and passive safety automotive products for OEMs and the aftermarket. Furthermore, TRW has four business segments: the Chassis Systems segment, the Occupant Safety Systems segment, the Automotive Components segment, and the Electronics segment. Each of this operating businesses are respectively responsible for 66%,19%,11% and 4% of sales.


    The Chassis segment focuses on manufacturing products related to brake and steering modules, as well as on linkage and suspension. In addition, the Occupant Safety Systems segment manufactures airbags, seatbelts and restrain systems. As for the Automotive Components segment, it produces body controls and some engine components as valves. Finally, the Electronic segment focuses on the design of electronic components for safety systems, chassis, powertrain and driver assistance. With a 2013 revenue of $17.4 billion, let me show you why this company is a great investment opportunity.

      


  • Why I Feel Bullish on Akamai

    Akamai Technologies Inc. (AKAM) is engaged in providing content delivery and cloud infrastructure services for accelerating and improving the delivery of content and applications over the Internet.


    In this article, let's take a look at this company and try to explain to investors the reasons this is an apparently appealing investment.

      


  • The Rise of an Underdog Cable Network

    In order to survive in the television entertainment industry, a company must be large and diversified. While this supposition is true to some extent, it doesn’t apply to all success stories in the media industry. AMC Networks Inc. (AMCX), post its spin-off from Cablevision Systems Corporation (CVC) in 2006, was shy of major profits at the start, but in a little over five years has managed to become one of the most tantalizing investment options in the TV market. In fact, investment gurus Steven Cohen (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) have been buying large amounts of the company’s shares this past quarter, hoping to gain decent profits in the long term.


    Slowly, but Steadily Gaining Terrain

      


  • GameStop Corp: A Company Needing to Adapt in a Changing Industry

    GameStop Corp. (GME) is a U.S. video game and entertainment software retailer. Based in Grapevine, Texas, the company operates 6,700 stores throughout America and Europe. It is the main retailer and often the only choice for gamers of new and used games. Offering a wide variety of used titles, having good customer service, accepting most titles, and also giving the customers credit on new games for their used ones, the pre-owned games (used games) business has generated as much as half of the company’s gross profit.


    Having a customer loyalty program (PowerUp Rewards), with more than 30 million users, the company ensured both its new and preowned gaming market, giving benefit to customers (usually young ones that use solely cash), and ensuring its market share against competitors such as Target or Wal-Mart. Though now the online retail store Amazon.com seems to be the most dangerous competition for GameStop.

      


  • An Intro to Magic Formula Investing

    Over the coming years I will be covering Joel Greenblatt (Trades, Portfolio)’s “magic formula” and the stocks that come up on the magic formula screen. Since its inception in 2006 I have been fascinated that such a simple formula can truly make value investing a whole lot easier.


    Since it has been a couple of years since "The Little Book That Beats the Market" has been released, chances are that “newer” value investors might not be familiar with it. So let’s start with the basics and what I hope to accomplish.

      


  • Joel Greenblatt - Large Caps Have a Much Better Valuation These Days Than Small Caps

    On the long side Greenblatt likes Hewlett-Packard (HPQ) and Apple (AAPL) both of which have huge returns on capital and very low valuations.


    He doesn't like buying a tech company on its own, but he loves buying a basket of these companies with these kinds of metrics.

      


  • This Auto Parts Bull Is Expected to Continue Outperforming

    The auto parts industry is starting to regain momentum and suppliers are making hefty profits from an improving economic situation. Or at least this seems to be the case for industry giant Magna International Inc. (MGA).


    Magna is an amply diversified company that is divided in three business segments: the External Production Sales segment, the Complete Vehicle Assembly operating Group, and Tooling, Engineering and Other. The biggest operating group is the External Production Sales segment, and is spread in various geographic regions. The U.S. market makes up approximately 50% of the company's income, while the European market is responsible for 30% of the income.

      


  • Ritchie Bros Auctioneers’ Debt Levels a Few Years After the Crisis

    I like to keep a close eye on the developments of the auctioneer industry. Sometimes, I come across interesting investment options, like Ritchie Bros. Auctioneers Inc. (RBA). Although I take many aspects into account when I analyze a company, I will focus, in this article, on debt and liabilities, in addition to examining what analysts and other top investors think about this company.



    This analysis is crucial to understanding the risks of investing, and will allow us to appreciate how leveraged the auctioneer is, and what kind of returns to expect from a long-term investment after the company reported its earnings last Monday. As the years 2008 and 2009 have taught us, leveraged companies with large amounts of debt can have a devastating impact over your investment. However, by taking a close look into the debt scheme of Auctioneers, we will be able to elucidate if the company is likely to maintain its capital, and use it for future growth.
      


  • Gotham Asset Management’s Big Bets on Tech

    Over the past days hedge funds have been filing their form 13-F, which is a quarterly report of equity holdings for institutional investment managers with at least $100 million in equity assets under management, as required by the United States Securities and Exchange Commission (SEC). In this article, let's concentrate in one particular hedge fund and try to see the principal holdings in its portfolio. I will look into Gotham Asset Management LP in which Joel Greenblatt (Trades, Portfolio) and Robert Goldstein serve as Managing Principals and co-CIOs for Gotham, with over 50 years of combined investment experience.


    Recently the fund reported its equity portfolio, as at the end of last year. The total value of the portfolio amounted to $4.2 billion, up from $3 billion disclosed at the end of the previous quarter. Consequently, the fund's total return was 40% in the last quarter. The filing revealed that at the end of last year, the fund added 219 new positions to its equity portfolio, and sold out of 150 other companies. The top ten portfolio holdings as of the end of the quarter represented 6.3%. The largest changes from previous 13-Fs fillings are in the technology sector (1.6%) followed by industrials and telecom (around 1% each).

      


  • Magna International: A Look at This Diverse Auto Part Supplier’s Profitability

    As one of the largest and most diversified auto parts supplier worldwide, Magna International Inc. (MGA) provides auto repair shops with an extremely vast array of products, including seating, roof systems, powertrain, electric vehicle systems, vehicle assembly and engineering, amongst others.


    Although this sort of diversification has earned the company some profitable years, many analysts consider it to be unsustainable in the long term, as management is forced to spread its resources throughout multiple product development groups. Also, the prior bankruptcy cases of fellow competitors Delphi Automotive PLC (DLPH) and Visteon Corp (VC), which had a similarly diverse business model, should be a warning regarding this firm’s balance sheet.

      


  • New Management and a Profitable Outlook for This Auto Parts Giant

    Stocks that are profitable in the first-quarter fiscal 2014, which also have encouraging projections for the entire fiscal 2014, have been drawing the attention of investors. This is the case of Johnson Controls (JCI), a diversified enterprise with a promising outlook.


    Even though JCI has to deal with big competitors such as Lennox International Inc. (LII) or Siemens AG (SI), the company successfully conducts three operating groups. These are: the building efficiency segment, the automotive segment, and the power solutions segment. Each segment is a multi-billion operating business, that respectively showed revenue growth throughout fiscal 2013.

      


  • DirecTV: Risks Remain, but Profits Are Growing

    Fighting for customer a solid customer base is one of the largest challenges among any pay TV provider in the industry. However, for satellite TV operators like DirecTV (DTV) this trial is even more difficult, given consumers' rapidly changing viewing habits. Furthermore, the company’s expansion strategy into the emerging Latin American market is supposed to be a source of growth, but some issues regarding subscriber declines in Brazil and a 70% overall decline in the region's subscriptions could be detrimental for profits this upcoming 2015.


    Nevertheless, the company’s 93,000 new domestic customers added in fourth quarter fiscal 2013 has helped improve overall results, boosting revenue by 7.7%, and allowing for margin expansion despite continued programming cost pressure. On another positive note, the TV provider has been generous with shareholders, returning $4 billion via share repurchases. However, in spite of the advanced technology and strong brand presence of DirecTV, long-term profits remain uncertain, amid headwinds in the Latin American market, currency fluctuations and changing consumer habits.

      


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