Joel Greenblatt

Joel Greenblatt

Last Update: 08-14-2018

Number of Stocks: 862
Number of New Stocks: 217

Total Value: $6,920 Mil
Q/Q Turnover: 33%

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

Joel Greenblatt' s Profile & Performance

Profile

Known for the invention of Magic Formula Investing, and founder of the New York Securities Auction Corporation (NYSAC). Greenblatt is founder and managing partner of Gotham Asset Management, LLC. He is the author of two investment books, including Joel Greenblatt: The little Book that Beats the Market. He is also an Adjunct Professor with Columbia Business School.

Investing Philosophy

Greenblatt tries to find cheap and good companies. He looks for value with a catalyst, so nice things happen sooner. Greenblatt likes special situations, and thinks that they are simply different places to find cheap stocks. In his own hedge fund, Greenblatt uses the basic principals in the Magic Formula: Look for high ROC and high earnings yield. He tries to figure out what "normalized earnings" will be 3-4 years into the future. Greenblatt makes sure the stock is very cheap based on normalized earnings. He is very concentrated in investing, 5 to 8 securities can make up 80% of his portfolio. One position could be as high as 30%.

Total Holding History

Performance of Gotham Absolute Return Fund

YearReturn (%)S&P500 (%)Excess Gain (%)
201710.0121.71-11.7
20167.9611.99-4.0
2015-10.241.24-11.5
3-Year Cumulative6.6 (2.2%/year)38 (11.3%/year)-31.4 (-9.1%/year)
20149.3113.47-4.2
201329.8132.3-2.5
5-Year Cumulative51.3 (8.6%/year)107.2 (15.7%/year)-55.9 (-7.1%/year)

Top Ranked Articles

2 Ways to Get Super Selective About Stocks in the Bubble Year of 2018 Look for obviously great businesses and obviously mispriced stocks. Only worry about the exact numbers second. Try to research one stock a week but only buy one stock a quarter. Be selective
Someone who reads my blog emailed me this question: Read more...
Joel Greenblatt's Secret to Beating the Market According to a Wall Street legend
Joel Greenblatt (Trades, Portfolio) has written several books on the subject of investing over the years, and he is a Wall Street legend. His books, "You Can Be a Stock Market Genius" and "The Little Book That Beats the Market," contain a wealth of invaluable information for investors on the topic of investing, and how you can improve your investment process by making a few simple changes to the way you think about the market. Read more...
Should You Buy a Cheap Stock That’s at the Very Edge of Your Circle of Competence? Your goal as a value investor should be to buy cheap stocks you understand. If you understand a business' 'market power' you understand the stock. Cheap means cheaper than peers
NACCO (NYSE:NC) is spinning off its Hamilton Beach small appliance business this week. NACCO’s remaining business will be a lignite coal miner (NACoal) that operates mostly unconsolidated mines under mostly long-term cost-plus supply contracts. In an earlier article, I explained why this lignite (“brown”) coal-producing business would be inside my “circle of competence” and the Hamilton Beach small appliance business would be outside my “circle of competence.” This led some people to ask: But what if Hamilton Brands trades at a deeper discount to your appraisal value than the post-spinoff NACCO? What if the value is in Hamilton Beach, not NACCO? You’re a value investor. So you’d have to buy Hamilton Beach, right? Read more...
Restaurant Industry Shows Signs of Sizzle 'Fast casual' and 'fast fine' are the industry's new buzzwords
The restaurant industry is seeing signs of sizzle after some of the worst sales results in years. Read more...
Joel Greenblatt Boosts Intuit, Walt Disney Positions Guru's largest buys of the 2nd quarter
Hedge fund manager Joel Greenblatt (Trades, Portfolio), who is known for the invention of Magic Formula investing and founding Gotham Asset Management, bought shares of the following stocks in the second quarter. Read more...
» More Joel Greenblatt Articles

Commentaries and Stories

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Joel Greenblatt's Gotham Funds: Market Observations US equity markets remain very expensive, Greenblatt says Joel Greenblatt - Joel Greenblatt's Gotham Funds: Market Observations
1. U.S. Equity Markets Remain Very Expensive (based on our 28-year valuation history) Valuations are high: The S&P 500 and the Russell 1000 are both in the 15th percentile towards expensive, meaning the indexes have been cheaper 85% of the time. o When markets have been at these levels in the past, one-year forward returns have averaged 2-4% and two-year forward returns have averaged 7-9%, which is well below normal returns historically. The Russell 2000 is in the 3rd percentile toward expensive, meaning the index has been cheaper 97% of the time over the last 28 years. o When the Russell 2000 has been this expensive in the past, one-year forward returns have averaged between -3 to -5%. Markets are speculative: The S&P 500 has returned 9.9% for the year-to-date period through August 31st. Large cap stocks are on pace for an annualized return of 15% for the year, which is well above the normal returns for the 28 year history that we examine. Small cap returns have been even higher; the Russell 2000 returned over 14% for the year-to-date period through August 31st. The MSCI US Momentum Index has returned 15.5% for the year-to-date period through August 31st. This puts it on pace for an annualized return of over 24% for the year. Fortunately, we believe the current environment has created a very strong opportunity set going forward. Based on our research, our SPREADS1 typically perform best following periods of speculation and high valuations, as markets revert to more normal levels. 2. The Large Disparity Between Growth and Value has Continued We are cash flow oriented value investors, not low price/book, low price/sales investors. Morningstar generally categorizes us as “blend.” As such we would expect to perform better than traditional value investors during these periods. However, such large disparities between value and growth/momentum will be challenging for us. Outperformance of growth and momentum-driven indexes over value has continued through the year-to-date period (as of August 31st): The Morgan Stanley Momentum Index has outperformed the Morgan Stanley Value Index by 31.8% (11.0% v. -20.8%). The Russell 1000 Pure Growth Index has surpassed the Russell 1000 Pure Value Index by 25.7% (28.6% v. 2.9%). The “Pure” style indexes include only those stocks that are considered fully value or growth as defined by Russell.2 The Russell 1000 Growth Index has outperformed the Russell 1000 Value Index by 12.7% (16.4% v. 3.7%) Looking back historically, we are in an extraordinary period of significant divergence between growth and value: From 1980 to 2006, value outperformed growth by an average of 2% (as measured by the Russell 1000 Value versus Russell 1000 Growth Index) to 5% (as measured by the Russell 2000 Value versus Russell 2000 Growth Index) per year. Since the global financial crisis in 2007, value-oriented strategies have underperformed growth strategies by an average of 5% per year (as measured by the Russell 1000 Value versus Russell 1000 Growth Index). Over this period, the only year where value substantially outperformed growth was 2016. In the trailing 11-year period in which growth has beaten value in an unsurpassed manner, there have been only two calendar years with a greater disparity (between the Russell 1000 Growth and Russell 1000 Value indexes) than the 2018 year-to-date period where growth has beaten value by 12.7%: 2009 (disparity of 17.5%) and 2017 (disparity of 16.5%). There Has Been Outperformance by Money Losers Over the year-to-date period, money-losing names have outperformed the overall indexes. Stocks represent ownership shares in a business. We do not believe this trend can persist and are confident that markets will revert back to reflect underlying company fundamentals. Our recent analysis for the year-to-date period through August 31st showed:3 Average return of all companies with negative cash flow in the Russell 1000: 15.7%. Average return of all companies with negative earnings yield in the Russell 1000: 31.5%. Average return of all companies with negative cash flow in the Russell 2000: 18.4%. Average return of all companies with negative earnings yield in the Russell 2000: 22.0%. Additionally, we continue to find the more expensive names, the companies we short, in the smaller cap universe, which has outperformed for the year-to-date period through August 31st. The Russell 1000 was up 10.1% while the Russell 2000 was up 14.3%. Based on history, this kind of environment is one where our style of value investing is not at its strongest. We are generally short “hope stocks,” many of which burn cash and/or trade at 50 to 100 times free cash flow. When people are attracted to those kind of stocks, our shorts don’t perform well. 4. The Opportunity Set is Significant Expensive valuation levels and the disparity between stock returns and fundamentals both point to very attractive expected spreads for us going forward. Even though the market is expensive based on history, we do expect positive returns. Our long portfolios are much cheaper than the market, according to our research, and we therefore expect them to outperform meaningfully. Our shorts are very expensive, according to our research, and can produce significant returns when markets revert to more normal levels. Additionally, based on our research, predictive indicators of our strategy include: Our spreads perform best following periods where markets are expensive. Our spreads perform best following periods where the most expensive stocks beat the cheapest stocks (based on our metrics). The valuation gap between value and growth has become very stretched. Although we can’t predict exactly when, we believe it will inevitably snap back in a big way. In the meantine, we stick to our systematic valuation process. In the periods following 1999 and 2007, valuations normalized leading to long periods of significant outperformance for our investment style. We believe our opportunity set is significant and our long/short returns over the next few years will rhyme quite well with similar periods in the past. Please feel free to contact us at any time by phone (877-974-6852) or email ([email protected]). Sincerely, Joel Greenblatt (Trades, Portfolio) and Robert Goldstein Managing Principals and Co-CIOs Important Information This document contains forward-looking statements regarding future events, forecasts and expectations regarding equity markets and certain of Gotham's strategies. Forward-looking statements may be identified terminology such terms as "may," "expect," "will," "hope," "believe" and/or comparable terminology. No assurance, representation, or warranty is made that any of Gotham's expectations, views and/or objectives will be achieved and actual results may be significantly different than reflected herein. Index, portfolio and stock valuations are based on Gotham's valuation methodology. Broad-based securities indexes mentioned herein are unmanaged and are not subject to fees and expenses typically associated with investment funds. Investments cannot be made directly in an index. The performance and volatility of Gotham's strategies will be different than those of the indixes. Spread is defined as how much our long portfolio outperformed our short portfolio adjusted for leverage (i.e. 100% exposure to the long portfolio, less 100% exposure to the short portfolio). The Russell Pure Style Indexes provide concentrated exposure to stocks that exhibit strong growth or value signals. Building upon Russell's traditional, cap-weighted style methodology, the Pure Style methodology is style-weighted, and effectively narrows the universe delivering a more tailored, 'pure' exposure to only those stocks considered fully value or growth. Average returns of an equally weighted portfolio comprised of companies that lost money within the specified indexes based on Gotham’s metrics. More...

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Applied Materials Is a Steal Trading under $45 and 10 times earnings, the stock is a bargain currently Ray Dalio, Joel Greenblatt, Steven Cohen, David Ca - Applied Materials Is A Steal
Applied Materials Inc. (NASDAQ:AMAT) is one of the world’s largest suppliers of semiconductor manufacturing tools; it has a hand in making nearly every chip in the world. The company’s systems are used in every step of the process except lithography. From a macro standpoint, the need for faster chips and desire for better technology will only increase. More...

CHIPS, MEMORY, NAND, SSD, DRAM, MICRON, INTEL, AMAT, APPLIED MATERIALS,


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Behavioral Investing: Is This Why Value Investing Is Hard? The power of siren stories often overshadows true evidence Jeremy Grantham, Joel Greenblatt - Behavioral Investing: Is This Why Value Investing Is Hard?
Of the many ways we can be seduced into making bad decisions, one of the most subversive is the alluring story. As investors, we’re quite likely to succumb to such stories. More...

JAMES MONTIER,


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Joel Greenblatt Boosts Intuit, Walt Disney Positions Guru's largest buys of the 2nd quarter Joel Greenblatt - Joel Greenblatt Boosts Intuit, Walt Disney Positions
Hedge fund manager Joel Greenblatt (Trades, Portfolio), who is known for the invention of Magic Formula investing and founding Gotham Asset Management, bought shares of the following stocks in the second quarter. More...

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The Human Trader's Secret Weapon 'Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match' Joel Greenblatt,David Einhorn - The Human Trader's Secret Weapon
"Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot." -- Joel Greenblatt (Trades, Portfolio) More...

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5 Stocks Trading Below Peter Lynch Value Kroger tops the list Pioneer Investments, Joel Greenblatt, Steven Cohen - 5 Stocks Trading Below Peter Lynch Value
Several gurus are focusing on stocks whose Peter Lynch fair values are far above the current prices, according to the GuruFocus All-in-One Screener. The following stocks are trading with wide margins of safety and have positive performances over the past 12 months. More...

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6 High-Yield Stocks in Gurus' Portfolios Cheap stocks with negative 12-month performance Chuck Royce,Joel Greenblatt - 6 High-Yield Stocks In Gurus' Portfolios
According to the GuruFocus All-In-One Screener, the following stocks have high dividend yields but performed poorly over the past 12 months. More...

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6 Undervalued Stocks With Rising Book Value Margin of safety for these stocks Charles Brandes,Joel Greenblatt - 6 Undervalued Stocks With Rising Book Value
According to the GuruFocus All-In-One Screener, the following companies have grown their book value per share (BV/S) over the past decade. More...

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6 Companies Growing Earnings LKQ Corp, F5 Networks on the list Chuck Akre,Joel Greenblatt - 6 Companies Growing Earnings
Companies growing their earnings per share are often good investments as they can return a solid profit to investors. According to the discounted cash flow calculator, the following undervalued companies have grown their earnings over a five-year period. More...

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3 Reasons to Think Twice About Concentration Concentrated investing is becoming increasingly popular. There could be a better approach Howard Marks,Joel Greenblatt - 3 Reasons To Think Twice About Concentration
In a recent Kiplinger piece, James K. Glassman argued that it is better to own fewer stocks and concentrate your portfolio. This is an increasingly popular opinion among (value) stockpickers. There’s some truth to it, but at the same time I’d call concentration a weapon of portfolio destruction. More...

LONG, PORTFOLIO MANAGEMENT,


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4 Bargain Stocks With Attractive PEG Ratios Canada's online gambler popped 7% in trading, closing at $35.55 a share Joel Greenblatt, Jim Simons - 4 Bargain Stocks With Attractive PEG Ratios
A small group of healthy and profitable mid-to-large-cap players in the Global Travel and Leisure industry are worth a look by investors who are seeking a bargain. More...

LEISURE, TRAVEL, LODGING, PEG RATIO, PRICE-EARNINGS, GROWTH, BARGAIN, STOCK, PRICE, UNDERVALUED, PETER LYNCH, MEDIAN PRICE-SALES, HISTORICAL


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Risk Reward With International Business Machines Dividend of 4.3% and positive earnings could make the current price worth paying Jim Simons,Joel Greenblatt - Risk Reward With International Business Machines
Since the last time I wrote about IBM (NYSE:IBM), Warren Buffett (Trades, Portfolio) is out, Steven Cohen (Trades, Portfolio) is out, Joel Greenblatt (Trades, Portfolio) is in, and Jim Simons (Trades, Portfolio) More...

TECHNOLOGY, IBM, MICROSOFT, AI, ARTIFICIAL INTELLIGENCE, CLOUD COMPUTING, BLOCKCHAIN, BIG BLUE


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Risk and Reward With AT&T The stock gets a downgrade, you get a bargain Jim Simons,Joel Greenblatt - Risk And Reward With AT&T
AT&T (NYSE:T) completed the acquisition of Time Warner a few days ago. It was almost immediately downgraded due to concerns over its debt, which is now closing in on $250 billion, making it the world’s most indebted company. Not a title to covet, but debt should never be an issue for AT&T since it has a massive audience across its television and telephone operations. More...

AT&T, WIRELESS, 5G, DIRECTV, TIME WARNER, HBO, TURNER, GAME OF THRONES, WESTWORLD


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5 Cheap Stocks Trading Below Peter Lynch Value Masonite International tops the list Pioneer Investments,Joel Greenblatt - 5 Cheap Stocks Trading Below Peter Lynch Value
Several gurus are focusing on stocks whose Peter Lynch fair values are far above the current prices, according to the GuruFocus All-in-One Screener. The following stocks are trading with wide margins of safety and have positive performances over the past 12 months. More...

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Bed Bath and Beyond: This Time It’s Different If you missed the price at $17, the stock remains a bargain Joel Greenblatt,Lee Ainslie - Bed Bath And Beyond: This Time It’s Different
Retail has been on fire this year, with apparel leading the way. Specialty retailers like TJX Companies (TJX) are up 23%. But Bed Bath & Beyond (NASDAQ:BBBY) has flatlined. Back in November, the stock dipped under $20 for the first time since 2008 and quickly popped back 20%, only to drop again. It is now back above $20 a share. More...

BED BATH AND BEYOND, SPECIALTY RETAIL, HOME GOODS


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6 Undervalued Stocks According to Peter Lynch Value Science Applications, Rio Tinto on the list. Pioneer Investments,Joel Greenblatt - 6 Undervalued Stocks According To Peter Lynch Value
According to the GuruFocus All-in-One Screener, several gurus are focusing on stocks whose Peter Lynch fair values are far above the current prices. The following stocks are trading with wide margins of safety and have positive performances over the past 12 months. More...

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3 Greenblatt Magic Formula Stocks Bought by Gurus in 1st Quarter Companies include Buffett’s Apple and Ackman’s United Technologies Warren Buffett, Joel Greenblatt, Tom Gayner, Ray D - 3 Greenblatt Magic Formula Stocks Bought By Gurus In 1st Quarter
On Tuesday, Joel Greenblatt (Trades, Portfolio)’s Magic Formula Screen listed Apple Inc. (NASDAQ:AAPL), Comcast Corp. (NASDAQ:CMCSA) and United Technologies Corp. (NYSE:UTX) in the top 30 among U.S. mega caps, companies with market caps of at least $100 million. Several gurus invested in these companies in the first quarter. More...

WARREN BUFFETT, JOEL GREENBLATT, TOM GAYNER, RAY DALIO, MASON HAWKINS, BILL ACKMAN, DANIEL LOEB, VALUE INVESTING, MAGIC FORMULA


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Chase Coleman’s Tiger Global Keeps Running With Sunrun Former 'Tiger Cub' fund gradually increased its holdings to over 13 million shares Joel Greenblatt - Chase Coleman’s Tiger Global Keeps Running With Sunrun
Chase Coleman’s Tiger Global Management disclosed on Thursday that it increased its position in Sunrun Inc. (NASDAQ:RUN) 5.15% according to GuruFocus real-time picks. More...

CHASE COLMAN, JULIAN ROBERTSON, TIGER GLOBAL MANAGEMENT, TIGER CUBS, REAL-TIME PICKS, TECHNOLOGY, JOEL GREENBLATT


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MS Global Franchise Buys Heineken, Adds to Coke, Sells Nestle Morningstar's bronze-medal fund is among the first to open a position in Western Europe's largest beer producer in the 1st quarter Joel Greenblatt,Ken Fisher - MS Global Franchise Buys Heineken, Adds To Coke, Sells Nestle
The management team of the Morgan Stanley Global Franchise Fund, among the top 12% of open-ended funds in the U.S., has indicated the establishment of two positions, which were reflected in regulatory filings disclosed this week. More...

BEER, HEALTHCARE, DRUGS, NIKE, COKE, MICROSOFT, EARNINGS,


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Revisiting Big 5 Sporting Goods A net current asset trade to avoid Jim Simons,Joel Greenblatt - Revisiting Big 5 Sporting Goods
In January, I wrote an article about the company because I thought it was on par with Hibbett Sports, which has rallied over 100% since October, just serving a different regional market. More...

RETAIL, SPORTING GOODS, BIG 5, HIBBETT


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