Joel Greenblatt

Joel Greenblatt

Last Update: 2014-08-15

Number of Stocks: 980
Number of New Stocks: 201

Total Value: $7,990 Mil
Q/Q Turnover: 42%

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

Joel Greenblatt Watch

  • 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.

      


  • Is This Baker Ready to Play?

    It has come to be a fact that the restaurant industry has no self-evident recipe for success. Panera Bread Company (PNRA) is one of the big boys in the fast bakery-coffee category, owning and franchising stores under Panera Bread, Saint Luis Bread Co., and Paradise Bakery brands. Working the suburban strip malls and regional malls all across the US, Panera Bread operated 1,736 bakery-cafes by the last quarter of 2013. Panera’s main products include baked goods, custom roasted coffees, sandwiches, soups and salads, as well as fresh dough and sweet goods which it supplies through a contract manufacturing arrangement to both owned and franchised cafes.


    Competition and Brands

      


  • The Stocks Investor Joel Greenblatt Wants

    Deviser of stock market investing tactics for the everyman, Joel Greenblatt (Trades, Portfolio) disclosed this week what he bought for his own portfolio in the fourth quarter. The guru owns 950 stocks in total, of which 220 are new as of the quarter. It is valued at $4.2 billion and most heavily weighted among the industrials (24.2%), technology (20.1%) and consumer cyclical (19.7%) sectors.

    He has relatively high turnover in his portfolio at 39% over the previous quarter due in part to his investing style. The “Magic Formula,” the famous strategy he created for consistently market-beating returns, involves: screening for top-ranked stocks, buying them and holding them for one year.  


  • Thoughts on Return on Capital and Greenblatt’s Magic Formula Part 2

    In part 1 of this post, I mentioned I caught a video interview with Joel Greenblatt at Morningstar. In the video, Greenblatt talks about indexing, and things that are not necessarily interesting to me and my investment strategy, but he also had some brief comments on return on capital. In the last post, I discussed the basic method that Joel Greenblatt (Trades, Portfolio) uses to define return on capital. I also discuss some of the fundamentals and the importance of this key business metric, so check out that post first, if you haven’t yet.


    The interesting thing was when Greenblatt specifically said he looks to fill his portfolio with businesses that have historically produced 50% returns on capital.

      


  • Apparel Retailer Pushed Down by Teen Fickle Trends and Pricing Pressure

    Aeropostale Inc. (ARO) is a mall-based specialty retailer of casual apparel and accessories for customers between the ages of 14 and 17. The company designs, markets and sells good-quality fashion and basic fasion products at relatively low prices under its namesake brand and P.S. from Aeropostale. Its products compete with those of other teen retailers such as Abercrombie&Fitch (ANF), American Eagle Outfitters (AEO), Hollister Co. (operated by ANF) and Old Navy, a brand owned by Gap Inc. (GPS). Aeropostale designs and sources all of its products, thus maintaining control of its proprietary brands. The firm owns 984 Aeropostale stores located in all 50 states, Puerto Rico and Canada, as well as 100 P.S. for Aeropostale locations.


    Lack of Moat and Narrow Margins

      


  • Thoughts on Return on Capital and Greenblatt's Magic Formula Part 1

    I recently watched a video of Joel Greenblatt with Morningstar. Most of the video discusses the index approach to investing using a value weight (as opposed to equal weight or market weight, which most indexes use).


    I’m not that interested in indexing, although for individuals that want completely passive exposure to stocks, value weighting certainly makes much more sense to me than market weighting (because market weighting systematically buys more of a stock as it goes up, thus forcing you to buy more of a stock as it becomes more overvalued, and less of a stock as it becomes undervalued… equal weighting makes these errors random, and value weighting essentially reverses the errors, thus allowing you to own more of a stock as it becomes cheaper, and less of it as it becomes more expensive).

      


  • A Tweaked Magic Formula Screen That Looks Very Promising

    I’ve recently decided to go back and re-read a few classics on performing valuations and what value-based systematic strategies have  worked over the years.  One of the most impressive findings in the financial literature of the past 10 years is the now-famous book by Joel Greenblatt (Trades, Portfolio): "The Little Book That Beats the Market."


    This is based on the simple realization that ranking companies based on specific measures of return on capital and earnings yield and choosing the best ranked ones to construct a portfolio would have outperformed the S&P over any three-year period since the mid-1960s.

      


  • The Market Magic of a Toy Company

    In the fast-paced modern-day world, traditional toy manufacturers must face a fierce battle against the electronics and video-game industry. Mattel Inc. (MAT) is the largest toy company in the leisure industry, and as such must face these challenges. However, this company’s combination of a solid product portfolio, international expansion and cost efficiency programs make it a strong contender for long-term investments. Let’s see what encouraged investment gurus John Hussman (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) to buy this company’s shares.


    Toys for Boys and Girls

      


  • A Personal Care Giant That Knows Where It’s Going

    ​In the personal care industry, product innovation, international presence and consumer loyalty are key factors for any company willing to sustain its market position. The Colgate-Palmolive Company (CL) is a firm that has united all of these aspects for the past 200 years and has grown to be one the world’s largest consumer product companies. Its product portfolio comprises a combination of toothpastes, detergents, shampoos, shower gels, deodorants and shaving products, which are sold in 225 countries. In addition to these traditional products, the firm also owns specialty pet food maker Hill’s, which sells its products via veterinarians and pet retailers. So, let’s see why investment gurus Joel Greenblatt (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio) are so keen on owing shares in this company.


    A Necessary Quality Product

      


  • Another Great Tobacco Buy

    A few days ago I wrote an article recommending British American Tobacco (BTI) because of its outstanding dividend, its presence in emerging markets such as Brazil and its determination to boost its below industry average margins. Now, I will take a look at a company which (1) Its more concentrated in the ailing European Market but (2) Is the most obvious M&A candidate within the big tobacco companies. Let's take a look at Imperial Tobacco (ITYBY) and try to make a compelling investment case for this big tobacco company.


    On Valuation, performance and cash dividends

      


  • A Tobacco Giant Worth Your While

    The tobacco industry is one of the most profitable markets for investors, given its large margins and shareholder returns. However, these past few years governments all over the world have been tightening up on regulatory laws and raising taxes, therefore reducing consumer volume of cigarettes. But the largest tobacco company worldwide, supported by investment gurus Joel Greenblatt (Trades, Portfolio) and Mario Gabelli (Trades, Portfolio), has successfully sustained its product demand and steadily increased revenue. So, let’s take a look at its business model and what the future holds in store.


    A Powerful Brand Portfolio and Emerging Market Presence

      


  • Joel Greenblatt on CNBC

    Joel Greenblatt on CNBC: "Expecting big returns".


      


  • Weekly Three-Year Low Highlights: AGI, ARO, WTSL, MRGE

    According to GuruFocus list of three-year lows; Alamos Gold Inc, Aeropostale Inc, Wet Seal Inc, and Merge Healthcare Inc have all reached their three-year lows.


    Alamos Gold Inc. (AGI) Reached the Three-year Low of $10.15

      


  • Willy and His Chocolate Factory: A Parable on Guru Valuation

    Adapted from The Old Man and the Tree: A Parable On Valuation Solomon, Schwartz & Bauman, Corporations - Cases and Materials at 143 (3d ed. 1996) and here


    Once there was a wise guy named Willy who owned a chocolate factory. This chocolate factory was very fine indeed and Willy thought it was beyond imagination. It served the region and customers enjoyed the chocolate he produced. Last year the chocolate factory produced 16 million pounds of chocolate for $28 million. The factory recently had a special marketing tactic that went awry. Although Willy was a chocolatier at heart, he wanted to retire. He decided to see how much he could sell his chocolate factory for, so he went put an ad in the classifieds of the newspaper entitled: “For sale, chocolate factory - best offer.”

      


  • Joel Greenblatt - The Little Book That Still Beats the Market



  • An Efficient and Aggressive Company in the Tobacco Industry

    On Sept. 30, David Winter added Lorillard Inc. (LO). I think he is making a bet that sales will increase based on higher volumes and higher pricing in a tobacco industry which is extremely competitive. So let's take a look at this company and try to explain to investors the reasons this is an apparently appealing investment opportunity.


      


  • AMC Networks: A Profitable Future?

    The pay TV industry is one of the toughest businesses, with some of the highest entry barriers worldwide. AMC Networks Inc. (AMCX) is one of the few cable networks that managed to upgrade its status and reputation, and turn into one of the most popular television content producers and distributors in the United States.


    Laying the Canvas

      


  • Time Warner: Television at Its Best

    Time Warner Inc. (TWX) is one of the largest video content creators and distributors in the world. Apart from owning popular television networks like HBO, TNT, CNN and the CW, this media giant is also established in the film industry. With Warner Bros. and New Line Cinema combining into the largest global filmmaker, this firm is several steps ahead of its competition in more than one way.


    Television at Its Best

      


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