Investment Strategies

These are lists of stocks generated using quantitative strategies which have been tested historically for returns. We recommend using the lists as a tool for finding new ideas for your investment portfolios based on information which worked in the past.

Investment Strategies

Large Cap Value

We created the ranking by putting together complementary strategies that we found during our research. It is essentially a value ranking, which looks at the price of a stock relative to a number of measurements that determine intrinsic firm value. Only the largest 10% of companies based on market cap are allowed in this portfolio.

Dividend Power

One of the simplest strategies has also proven to be one of the most effective. This strategy defines a universe of stocks based on Earnings Yield, with higher Earnings Yield considered better, because it signifies a low valuation. Then, we sort the universe of stocks by their Dividend Yield, picking the top 35. The result is a portfolio that does a relatively good job weathering downturns, while still catching much upward motion during bull markets.

Warren Buffett Universe

Based on the strategy in the book Buffettology, this universe of stocks will have growing, profitable, companies that generally have a strong financial position. It finds stocks with high Return on Equity and Return on Assets, Growing Earnings Per Share and Book Value Per Share, and income that can cover long term debt over a reasonably short period of time.

Peter Lynch Universe

This universe is loosely based on Peter Lynch's stock picking method outlined in his books One Up on Wall Street and Beating the Street. It selects stocks with a low market cap - but not micro-cap stocks, a low PEG ratio, and a reasonable Debt to Equity Ratio. When calculating returns for the universe, we picked the top 35 stocks based on dividend yield. By limiting the universe, we get a list of stocks that is small, unlevered, and reasonably valued given its historic growth rate - all of which are considered attractive characteristics.

Ben Graham Formula

The Ben Graham Formula strategy contains ultra-stable stocks that will infrequently lose money if held over a long period of time. It was developed based on a screen in Graham's book The Intelligent Investor. For those who have read the book, it is the "Defensive Investor" screen. It selects stocks that are large in terms of sales and total assets, have a strong track record of earnings and dividend payments, have a reasonable current ratio and level of long term debt, and that have a low valuation given by PE Ratios and Price to Book Value ratios.

Growth at a Reasonable Price (GARP)

Growth at a reasonable price finds stocks with recent historical growth - in terms of earnings, sales, and assets - that are selling at low prices compared to the earnings and dividends they pay out.

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