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Email ArticleIn this exercise we have listed the 25 most actively traded stocks (volume) over the last year and ranked them based on The Applied Finance Group's (AFG's) key investment criteria including valuation attractiveness, management quality and expected changes in Economic Margins (what a company earns above its true cost of capital). These companies seem to always garner the most attention from within the investment community, so we decided to add our insights into which of these firms look attractive and worthy of the hype and which you may want to avoid.
AFG’s criteria used in its stock selection process have proven successful at identifying winners and losers in the market including its proprietary measure of corporate performance (Economic Margin), valuation, management quality and earnings quality among other criteria.
To stay updated on companies AFG believes are attractive investment opportunities register for ValueExpectations.com It's Fast and Free!
Of the 25 companies listed that are heavily traded, eight stocks appear to be potential buys given their expected improvement in Economic Margins, attractive valuations, and wealth creating management teams. The list includes five stocks in the technology sector and one each in the basic material, consumer services, and health sectors.
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Investment |
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| Ticker |
Name |
Sector |
Opportunity |
EM Change Signal |
| 25 Most Actively Traded S&P 500 Stocks (ex. Financials) |
|
(NYSE:PFE) |
PFIZER INC |
Health |
Attractive |
Positive |
|
(NYSE:HPQ) |
HEWLETT-PACKARD CO |
Technology |
Attractive |
Positive |
|
(NYSE:FCX) |
FREEPORT-MCMORAN C & G |
Basic Material |
Attractive |
Positive |
|
(NYSE:IBM) |
IBM |
Technology |
Attractive |
Positive |
|
(NASDAQ:AAPL) |
APPLE INC |
Technology |
Attractive |
Positive |
|
(NASDAQ:MSFT) |
MICROSOFT CORP |
Technology |
Attractive |
Positive |
|
(NASDAQ:MSFT) |
AMAZON.COM INC |
Consumer Services |
Attractive |
Positive |
|
(NASDAQ:ORCL) |
ORACLE CORP |
Technology |
Attractive |
Positive |
|
(NYSE:MRK) |
MERCK & COMPANY, INC. |
Health |
Attractive |
Fair |
|
(NYSE:COP) |
CONOCOPHILLIPS |
Energy and Extraction |
Neutral |
Fair |
|
(NYSE:JNJ) |
JOHNSON & JOHNSON |
Health |
Neutral |
Fair |
|
(NYSE:WMT) |
WAL-MART STORES INC |
Consumer Services |
Neutral |
Fair |
|
(NYSE:CVX) |
CHEVRON CORP |
Energy and Extraction |
Neutral |
Fair |
|
(NYSE:PG) |
PROCTER & GAMBLE CO THE |
Consumer Non Durable |
Neutral |
Fair |
|
(NYSE:KO) |
COCA-COLA CO |
Consumer Non Durable |
Neutral |
Fair |
|
(NYSE:XOM) |
EXXON MOBIL CORP |
Energy and Extraction |
Neutral |
Fair |
|
(NASDAQ:GOOG) |
GOOGLE INC A |
Miscellaneous |
Neutral |
Fair |
|
(NASDAQ:CSCO) |
CISCO SYSTEMS INC |
Technology |
Neutral |
Fair |
|
(NYSE:GE) |
GENERAL ELECTRIC CO |
Capital Goods |
Unattractive |
Negative |
|
(NASDAQ:INTC) |
INTEL CORP |
Technology |
Unattractive |
Negative |
|
(NASDAQ:QCOM) |
QUALCOMM, INC. |
Technology |
Unattractive |
Negative |
|
(NYSE:SLB) |
SCHLUMBERGER LTD |
Capital Goods |
Unattractive |
Negative |
|
(NYSE:F) |
FORD MOTOR CO |
Consumer Durable |
Unattractive |
Positive |
|
(NYSE:T) |
AT&T INC |
Technology |
Unattractive |
Negative |
|
(NYSE:X) |
UNITED STATES STEEL CORP |
Basic Material |
Unattractive |
Negative | |
Source: EconomicMargin.com
AFG's Valuation Metric – Measures the percent to target (deviation between a stock’s current trading price and its AFG current default target price). To derive the intrinsic value of a firm, AFG uses its proprietary Valuation Model (modified discounted cash flow model).
Economic Margin - A corporate performance measurement that addresses the gaps in GAAP, eliminating distortions caused by accounting policies to measure what a company is truly earning above or below their cost of capital.
Management Quality – Assesses management’s ability to make wealth creating decisions.
To stay updated on how other professional investor's currently view the market as well as their favorite investment ideas... Join our Market Forecast Project survey and be among the first to receive the results!
Benefits of Joining the AFG’s Market Forecast Project:
• Understand Trends of Investor Sentiment and Incorporate MFP Forecasts to Better Position your Portfolio
• Enhance Client Communication
• Actionable Long/Short Investment Ideas to help you Outperform!!!
• Use the "Wisdom of crowds" to Gain Insight into Popular Themes and Events in the Market
Why Participate:
Those that participate will receive insights that will only be shared with survey participants and participants will be the first to receive the results. In addition, as a participant you will have access to special research reports and seminars developed by The Applied Finance Group covering stock research, general market and economic issues.
Participant Commitment:
Participants will complete a short monthly survey dealing with the stock and bond markets, as well as select economic issues. As a participant you will be the first to receive the survey results before it is distributed to the public.
Who is AFG:
The Applied Finance Group is an independent equity research firm dedicated to helping our clients make better investment decisions. We help our clients take advantage of mispricings in the market, understand the market expectations embedded in stock prices and provide a set of tools designed to save investors time with their daily due diligence activities. For more information on The Applied Finance Group visit www.EconomicMargin.com.
How To Participate:
Follow the link below and fill out AFG’s Market Forecast Project Survey Application. Click here for more information and to participate. You will receive the results of our last survey and will be on our list to participate in next month’s questions.
To stay updated on how other professional investor's currently view the market join our Market Forecast Project survey and be among the first to receive the results.
