We would like to announce the results of the May 2014 Value Idea Contest. Each qualified entry will receive $100 and win an additional $1,000 if their idea doubles in 12 months from the date of submission. There is no limit on the number of prizes to be awarded.
UPDATE: Based on GuruFocus user votes, the May Value Idea Contest winner is DCResearch with the article, Imperial Holdings: Trough Valuations, Materially Undervalued.
DCResearch will be receiving an additional $250 from GuruFocus and be entered in the Value Idea of the Year Contest.
Congratulations on a well-deserved victory and thank you for your valuable contribution to GuruFocus.com.
These are the submissions from May and their respective scores. The articles that receive 26 points or higher will be tracked and the authors will receive $1000 if the pick doubles in 12 months. The submissions that get lower points will be paid $50 each if these writings are exclusive to GuruFocus.
- Warren Buffett Recent Buys
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GURUFOCUS NOTES TO VALUE IDEA SUBMISSIONS:
Long-Term Focus at Johnson Controls: This was a shorter article and the stock does not appear to be undervalued. While it does represent a quality company, no convincing argument was made for this being a superior investment over other stable, growing firms.
Bed Bath & Beyond: Undervalued During This Dip: The article operated under a direct value play citing mispricing of the stock due to it being out of favor. The author is targeting a 30-35% upside based on valuation alone plus continued growth from the company. They also highlighted several GuruFocus site tools that enhanced the analytical aspects of the article.
Express Offers Attractive Free Cash Flow With 45% Upside Potential: The writing was straightforward and outlined a case for 45% upside return. The company may be cheap but growth seems to be a concern as the firm shows shrinking margins over the last two years. This needed to be addressed in the article.
A Look At Gladstone Land: The author makes a case for farmland being a safe investment and also operates under the assumption that land prices will continue to increase. While we agree in principal that farmland will always have value, the continuation of historically high farmland valuations should not be assumed. The stock has a low yield and high debt which results in a somewhat unconvincing argument to many deep value disciples.
HRT Participacoes: The Polvo Baby Has Been Thrown Out With the Bathwater: This was a very in-depth analysis of a stock unfamiliar to many US investors. The Brazilian oil miner is down 97% over 3 years and the author views this as a discounted asset opportunity with company reserves worth roughly 4x the market cap.
Is The Most Profitable Oil Sands Play Outside of Canada?: Very interesting article about a Utah-based penny stock with large oil sand reserves. The author gives an extremely detailed analysis and makes a convincing argument for a potential ten-bagger return. The article also included lots of images, charts and even video to illustrate the author's case.
Datalink: A Pendulum-Like Swing Offers 100% Upside Potential: This was another thorough and well-written article. The author included investment cycle theory wisdom from Howard Marks which added credibility to his thesis. The case was made for Datalink to be undervalued by almost 50%.
History Rhymes: Sequential Brands Group Could Be Iconix Brands All Over Again: Heavy comparisons are made to Iconix but rightfully so since many SQBG execs came from the firm. Sequential appears overvalued at today's prices but the author makes a case for the the growth and makes forecasts using ICON's history and track record. This is a very in-depth piece but the reader must believe in the notion that Sequential is Iconix 2.0.
Imperial Holdings: Trough Valuations, Materially Undervalued: This was a very interesting article on an overlooked sector - life settlements. There are numerous risk variables which demand a severe discount but the writer argues that this requirement is met. It was the longest submission we received. The submission was very well researched and impressively thorough.
West Marine: Growth Prospects and Catalysts Lead to 60% Upside Potential: Another well analyzed thesis, the author lays out the bull and bear case to highlight upside as well as risk. He believes there to be 60-100% upside with a 30% downside risk. This was a very well-written piece, but overall the company seems to have difficulties in growing its revenue. The profit margin is thin and the company lost money in 5 of the last 10 years. It does not appear to be a great business.
Fossil: Catalysts in 2015 With More Than 50% Potential Return: The submission was skillfully written but does not include any new information. All data and conclusions are drawn from financial data and few personal insights are given. It seems like a decent buy but limited to 30% upside. This is not a no-brainer buy that would excite many investors.
Schlumberger Ltd (SLB): Solid Company And Growing: The article was very in-depth and included numerous visuals from GuruFocus site tools and company presentations. It is another through piece that while good, is not terribly exciting since there does not appear to be substantial upside from this mega cap stock. Those seeking safer investments, however, may find this to be one of few undervalued large companies.
These are the contest rules.
To qualify for the contest, your submission must follow these rules:
1. The idea must be well researched. Your analysis must cover at least these areas:
a. Company history and business
b. Financial strength
2. It is recommended that you follow the format of past winners. An example is this month’s winner here: Yesterday Is History, Tomorrow a Mystery, Now DJCO Is a Present
3. We will evaluate each submission in the seven areas on 1-5 scale:
a. Business Quality
b. Financial Strength
d. Analytical Depth
4. The writing is exclusive to GuruFocus. But you can post an abstract at other places and link to the full article on GuruFocus.
5. The same idea has not been submitted for the contest by others within the previous 6 months.
1. The submissions that follows the above rules will qualify for at least $25 in writer’s compensation
2. Those scored 26 or above will be awarded $100. There is no limit on the number of awards per month.
3. The stock picks of those scored 26 or above will be tracked for up to 12 months. If a pick doubles within 12 month of submission, the author will be awarded $1,000 in cash.