Magic Formula Stock Screen, Based on Next FY EPS Estimates

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The Manual of Ideas is pleased to provide a unique screening service for investors looking to uncover hidden value in the stock market.

Inspired... (More) The Manual of Ideas is pleased to provide a unique screening service for investors looking to uncover hidden value in the stock market.

Inspired by the best-in-class Zeiss 10x45 Victory Rangefinding Binocular, which is described as "essential equipment for long range hunting and a reliable shot," the 10x45 Value Hunter is designed as an essential tool for any value investor's "arsenal." Whether you run your own screens or not, you'll find the 10x45 Value Hunter a valuable ally as you seek out undervalued companies trading on U.S. stock exchanges.

We have worked hard to overcome the drawbacks of typical stock screeners. Most of all, we have designed the 10x45 Value Hunter stock screens in a way that minimizes the inclusion of companies on the basis of non-recurring or irrelevant data. We have also sought to exclude companies that may meet certain narrow screening criteria but are otherwise fatally flawed as value investments. Of course, no screening tool is perfect, but we believe the 10x45 Value Hunter represents a step up from the alternatives.

The 10x45 Value Hunter brings you 10 screens featuring 45 companies each — and it does so every two weeks. Inside, you'll find the following array of essential screens for value investors:

1. Contrarian: Shunned by the market, but not by insiders — Companies close to 52-week lows, with consistent insider buying and no selling
2. Contrarian: Biggest Losers (deleveraged & profitable) — Non-financial companies with no net debt, positive analyst estimates for next year's EPS, and large YTD price drop
3. Value with Catalyst: Cheap Repurchasers of Stock — Companies that may be creating value by reducing their shares outstanding at relatively cheap prices
4. Profitable Dividend Payors with Decent Balance Sheets — Dividend-paying companies with no net debt and positive EPS estimates
5. Deep Value: Lots of Revenue, Low Enterprise Value — Companies that trade at low multiples of net revenue
6. Deep Value: Neglected Gross Profiteers — Companies that trade at low multiples of gross profit
7. Activist Targets: Potential Sales, Liquidations or Recaps — Companies that may unlock value through a corporate event
8. "Magic Formula," based on Trailing Financials — Companies with high returns on capital employed, trading at high trailing EBIT-to-enterprise value yield
9. "Magic Formula," based on This Year's EPS Estimates — Companies with high returns on capital employed, trading at high earnings yields (based on this FY EPS estimates)
10. "Magic Formula," based on Next Year's EPS Estimates — Companies with high returns on capital employed, trading at high earnings yields (based on next FY EPS estimates)

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