Joel Greenblatt

Joel Greenblatt

Last Update: 2014-11-14

Number of Stocks: 970
Number of New Stocks: 186

Total Value: $10,053 Mil
Q/Q Turnover: 45%

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

Joel Greenblatt Watch

  • 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 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.


  • 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


  • An Auto Parts Supplier With a Great Outlook

    The auto parts sector is known for its competitiveness and cyclical behavior, which can affect the long-term economic sustainability of a stock. With big competitors in this industry such as TRW Automotives Holdings Corp (TRW) and Allison Transmission Holding Inc (ALSN), BorgWarner Inc (BWA) is leading the way in terms of innovation according to the new ecologic trend of the automotive industry.

    BWA is an auto-parts supplier that operates in two segments: manufacturing engine supplies that reduce emissions, and DCT (dual-clutch technology) transmissions. The engine segment is accountable for 70% of the company’s sales, and is thus largely responsible for the firm’s total revenue rising up to $7 billion. This company is focused on improving fuel efficiency and reducing emissions for its customer’s products. Thus, making long-term economic profitability in an increasingly ecologically concerned industry is what is expected for this company.


  • 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


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