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Ten High Free Cash Flow Yield Stocks That Pass the Tests of Great Investors – Validea's Guru Investor Blog
High free cash flow yield stocks can represent a compelling investment opportunity, as these companies generate substantial cash compared to their market capitalization. This strong cash generation efficiency demonstrates their operational excellence and ability to effectively convert sales into actual cash after covering essential business costs like capital expenditures and working capital requirements. Robust cash flow provides these companies with significant strategic advantages. They can self-fund growth initiatives like expansions or acquisitions, reduce their debt… Read More
Ten Fundamentally Sound Dividend Aristocrats – Validea's Guru Investor Blog
The Dividend Aristocrats represent an elite subset of S&P 500 companies that have demonstrated exceptional reliability in rewarding their shareholders. The criteria for joining this prestigious group are stringent: companies must increase their dividend payments annually for a minimum of 25 consecutive years. This exclusive club currently has fewer than 70 members, representing diverse sectors from healthcare to manufacturing. These companies’ ability to consistently raise dividends speaks volumes about their financial resilience. By maintaining and… Read More
The Ten Most Fundamentally Sound S&P 500 Stocks – Validea's Guru Investor Blog
The S&P 500’s remarkable performance in recent years has been heavily driven by a handful of dominant technology companies, particularly the “Magnificent Seven” – Apple, Microsoft, Alphabet, Amazon, NVIDIA, Meta, and Tesla. While these tech giants have certainly delivered impressive returns, their outsized influence has overshadowed the broader market composition and potentially created a blind spot for investors. It’s crucial to remember that the S&P 500 encompasses nearly 500 other companies across diverse sectors, many… Read More
Ten Guru Approved NASDAQ 100 Stocks – Validea's Guru Investor Blog
The NASDAQ 100’s remarkable ascent over recent years has undoubtedly pushed the index’s overall valuation metrics to elevated levels, raising concerns among value-conscious investors. This broad valuation expansion has led some market participants to dismiss the entire index as overvalued. However, such a blanket assessment overlooks the nuanced reality that individual companies within the index still offer compelling value propositions when examined through sophisticated analytical frameworks. Consider the comprehensive analysis conducted using Validea’s multi-factor screening… Read More
Ten Fundamentally Sound Technology Stocks – Validea's Guru Investor Blog
While technology stocks have experienced remarkable momentum and appreciation in recent market cycles, savvy investors recognize that opportunities for value still exist within this dynamic sector. The key lies in looking beyond surface-level market movements to identify companies with robust fundamentals. Using Validea’s comprehensive analytical framework, which evaluates stocks through the lens of 22 distinct investment strategies pioneered by some of the most successful investors in history, we’ve uncovered several promising technology companies. These strategies,… Read More
Practical Lessons from Cem Karsan | Inside the Hidden Forces Moving Markets – Validea's Guru Investor Blog
In this episode of Excess Returns, Matt and Jack explore key lessons from one of our most popular guests, Cem Karsan. Through selected clips from multiple interviews, they unpack Karsan’s unique insights on markets, investing, and risk management. Whether you’re an active trader, long-term investor, or financial professional, this episode offers valuable frameworks for understanding markets and risk. Jack and Matt break down complex concepts into actionable insights, showing how Karsan’s options trading background provides… Read More
Practical Lessons from Jason Buck | The Benefits of an All-Weather Investment Strategy – Validea's Guru Investor Blog
In this episode, Jack and Matt dive deep into their conversation with Jason Buck about building truly robust investment portfolios that can withstand any market environment. Moving beyond the typical “stocks only go up” mentality, they explore critical concepts like: The real difference between offense and defense in portfolio construction Using colorful analogies from the Dallas Cowboys’ infamous Herschel Walker trade to Dennis Rodman’s overlooked impact on the Chicago Bulls, this episode breaks down complex… Read More
Show Us Your Portfolio: Mike Taylor | Inside the Investment Strategy of a Hedge Fund Veteran – Validea's Guru Investor Blog
In this episode of Excess Returns, we sit down with Mike Taylor, portfolio manager of Simplify’s PINK healthcare ETF, for a fascinating discussion about how he mansges his personal portfolio. Drawing from his extensive experience at firms like Citadel and Millennium, Mike shares candid insights about what makes a successful investor and his portfolio construction process. Key topics include: Mike brings both humor and deep expertise to this conversation, offering rare insights into how a… Read More
Ten High Shareholder Yield Stocks Wall Street Legends Might Like – Validea's Guru Investor Blog
Shareholder yield measures the total value a company returns to investors compared to its market value, encompassing three key elements. Dividend yield represents direct cash payments to shareholders from profits. Share buybacks create the second component, as repurchasing stock increases the value of remaining shares. The third element comes from debt reduction, which strengthens the company’s financial position and enhances its potential for future earnings growth. Investors increasingly favor this metric because it provides a… Read More
Ten Guru Approved High Insider Ownership Stocks – Validea's Guru Investor Blog
The level of stock ownership by a company’s executives and board members serves as a powerful metric for investors. When leadership holds a meaningful stake in their company, their personal financial interests become directly tied to those of other shareholders. This creates a natural incentive structure where executives are motivated to pursue strategies that create lasting value rather than chasing quarterly numbers or personal gains. Company leaders who own substantial shares experience the same ups… Read More
A $33 Billion Value Manager Who Has Actually Outperformed | Scott McBride – Validea's Guru Investor Blog
In this episode of Excess Returns, Justin and Jack sit down with Scott McBride, CEO and portfolio manager at Hotchkis and Wiley, to explore the approach that has allowed them to succeed during a time when many other value investors have failed. McBride, with 24 years at the firm, shares insights into how their team has achieved impressive results by being willing to think differently from consensus. Key topics discussed: How market sentiment and emotion… Read More
Practical Lessons from Jim Paulsen – Validea's Guru Investor Blog
In this episode, Matt and Jack break down key insights from our interview with market strategist Jim Paulsen. Paulsen offers unique perspectives on how markets have evolved over his 40-year career, from the days when investors checked bank signs for daily Dow quotes to today’s high-speed algorithmic trading environment. Key topics covered: The conversation features numerous “aha moments” where Paulsen reframes conventional market wisdom in enlightening new ways. His candid insights on what really drives… Read More
Ten Growth Stocks Meeting the Tests for Lasting Success – Validea's Guru Investor Blog
The G-Score is a financial analysis framework created by Professor Partha Mohanram in 2005 to evaluate growth stocks, complementing the F-Score system that Joseph Piotroski developed for value stocks. It examines eight key indicators of a company’s financial health, with special attention to metrics that matter most for growth companies. The system looks at how consistently a company invests in its future through R&D, capital investments, and advertising. It also considers profitability metrics like return… Read More
Ten Stocks Warren Buffett Might Buy (If He Could) – Validea's Guru Investor Blog
Drawing from Mary Buffett’s insights in Buffettology, Validea’s Warren Buffett model captures Warren Buffett’s methodical, long-term investment strategy. At its core, the strategy seeks companies that demonstrate sustained excellence through strong earnings, prudent financial management, and exceptional returns for shareholders. The strategy identifies companies that have proven their worth through consistent performance across several key metrics. A qualifying company must demonstrate predictable earnings growth over a full decade, with no negative years. It should maintain… Read More
Ten Top Dividend Growth Stocks – Validea's Guru Investor Blog
Dividend growth stocks represent a powerful cornerstone for building long-term wealth, offering investors a unique combination of current income and potential capital appreciation. These companies, which consistently increase their dividend payments year after year, typically demonstrate strong financial health, stable business models, and a commitment to shareholder returns. The compounding effect of reinvested growing dividends can substantially boost total returns over time, while the rising income stream helps investors keep pace with or exceed inflation.… Read More
Timeless Lessons from History's Best Traders | Jack Schwager – Validea's Guru Investor Blog
Market Wizards author Jack Schwager returns for another fascinating conversation about trading psychology, risk management, and lessons learned from interviewing the world’s top traders. In this wide-ranging discussion, Schwager shares stories from his early career as a market analyst in the 1970s, his transition to writing the influential Market Wizards series, and his personal journey understanding that his talents lay in analyzing and writing about trading rather than trading itself. Key highlights include: The origin… Read More
Ten Fundamentally Sound Low Volatility Stocks – Validea's Guru Investor Blog
The low volatility strategy looks for stocks that have smaller price swings than the overall market. Research shows these steady stocks have actually delivered better returns relative to their risk than volatile stocks over time – which goes against what traditional investing theory would predict. This makes them attractive to investors who want more consistent performance and less downside risk when markets get rough. Using our database, we identified stocks that are among the most… Read More
Ten Top Wide Moat Stocks – Validea's Guru Investor Blog
In an investment landscape marked by rapid technological change and intense competition, companies with wide economic moats have proven to be exceptional long-term investments. These businesses possess sustainable competitive advantages that protect their market position and profitability, whether through powerful network effects, high switching costs, cost advantages, or valuable intellectual property. Wide moat companies can typically maintain above-average returns on capital for extended periods, allowing them to reinvest profits at attractive rates and compound shareholder… Read More
Practical Lessons from Ed Yardeni – Validea's Guru Investor Blog
In this deep-dive conversation, Jack Forehand and Matt Zeigler break down key insights from their interview with Dr. Ed Yardeni, one of Wall Street’s most respected market strategists. The discussion explores how Yardeni’s independent thinking and data-driven approach led him to correctly predict several major market developments in 2023-24, including the path of inflation and the absence of a widely-predicted recession. The hosts analyze Yardeni’s unique framework for understanding market cycles, particularly how monetary, credit,… Read More
Ten Top Guru-Approved High Quality Stocks – Validea's Guru Investor Blog
In an era where market volatility and economic uncertainty can quickly expose corporate weaknesses, high-quality stocks have proven to be resilient cornerstones of successful investment portfolios. These exceptional companies typically demonstrate consistent earnings growth, strong balance sheets, and durable competitive advantages that allow them to maintain high returns on capital even during challenging times. By focusing on businesses with superior financial strength and operational excellence, investors can build portfolios that not only weather market storms… Read More
Ten Top Momentum Stocks – Validea's Guru Investor Blog
In today’s fast-paced markets, momentum investing has emerged as a powerful strategy for capturing sustained price trends and market inefficiencies. Research consistently shows that stocks exhibiting strong relative strength and positive price momentum tend to continue outperforming, driven by factors like earnings surprises, institutional buying pressure, and the gradual diffusion of positive information throughout the market. This momentum effect, far from being just a short-term anomaly, has proven to be a persistent source of excess… Read More
Ten Guru-Approved Cheap Value Stocks – Validea's Guru Investor Blog
In an era of market volatility and economic uncertainty, value investing continues to prove its worth as a time-tested strategy for building long-term wealth. By focusing on companies trading below their intrinsic value, investors can create a margin of safety that helps protect against downside risk while positioning themselves to benefit from eventual market corrections. Value stocks, which typically trade at lower price-to-earnings, price-to-book, or other valuation metrics compared to the broader market, have historically… Read More
Busting 50 Years of Investing Myths | Rob Arnott – Validea's Guru Investor Blog
In this episode of Excess Returns, Jack Forehand and special guest host Perth Tolle sit down with Rob Arnott, founder of Research Affiliates and pioneer of fundamental indexing. Rob discusses his thought-provoking article “50 Years of Innovation, Myth Making and Myth Busting,” written for the 50th anniversary of the Journal of Portfolio Management. The conversation covers several critical investing myths and insights, including: Rob brings over four decades of investment experience to this discussion, offering… Read More
Practical Lessons from Cliff Asness – Validea's Guru Investor Blog
In this episode, Jack Forehand and Matt Zeigler discuss their fascinating interview with AQR founder Cliff Asness. They explore several key topics from their conversation, including: Cliff’s humorous take on morning routines and why correlation doesn’t equal causation when it comes to success habits The “Less Efficient Market Hypothesis” and why Cliff believes markets may be becoming less efficient over time, particularly evident in the dot-com bubble and 2019-2020 market events A thoughtful discussion on… Read More
Ten Top Joel Greenblatt Magic Formula Stocks – Validea's Guru Investor Blog
The Magic Formula, introduced in “The Little Book That Beats the Market,” simplifies the complexity of stock selection into a straightforward two-part analysis. At its core, the method examines Return on Capital, which measures how well a company converts its resources into profits, and Earnings Yield, which indicates whether a stock’s price is low compared to its earnings potential. This approach stands out by combining these metrics into a ranking system that automatically identifies two… Read More
Ten GARP Stocks Peter Lynch Might Like – Validea's Guru Investor Blog
Peter Lynch made his name at the helm of Fidelity’s Magellan Fund, and investment research firm Validea has distilled his investment philosophy into a methodical framework. The approach centers on finding companies that demonstrate growth characteristics while remaining reasonably priced – a strategy known as GARP (Growth At a Reasonable Price). The methodology hinges on the PEG ratio, which measures a stock’s P/E ratio against its earnings growth rate. A PEG ratio under 1.0 may… Read More
Five Stocks Both Warren Buffett and Peter Lynch Might Like – Validea's Guru Investor Blog
Finding stocks that satisfy both Warren Buffett’s quality-focused investment approach and Peter Lynch’s growth-at-a-reasonable-price strategy can help identify exceptionally strong companies. Based on Validea’s analysis, several companies currently pass both legendary investors’ stringent criteria with high scores. The Buffett Strategy: Focus on Quality and Predictability Warren Buffett looks for companies with: The Lynch Strategy: Growth Without Overpaying Peter Lynch seeks: Discover how Validea’s models can help you identify high-quality, long-term investments, even in changing market… Read More
Ten Top Benjamin Graham Stocks – Validea's Guru Investor Blog
The Graham-Inspired Value Strategy systematically identifies undervalued stocks by focusing on established companies with proven track records rather than speculative opportunities. This approach, developed by Validea based on Benjamin Graham’s investment principles, uses specific criteria: A company must first meet basic operational requirements: annual revenue exceeding $340 million and five consecutive profitable years. The strategy deliberately excludes technology companies, preferring traditional industry sectors. Strong balance sheets are essential. Companies need a current ratio greater than… Read More
Ten Top Twin Momentum Stocks - January 2025 – Validea's Guru Investor Blog
The Twin Momentum strategy looks at combining traditional price momentum with improving fundamentals to generate market outperformance. The strategy uses seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that are combined into a single fundamental momentum measure. The strategy is based on the research paper “Twin Momentum” by Dashan Huang and looks for stocks that… Read More
Ten Top Technology Dividend Aristocrats – Validea's Guru Investor Blog
Technology dividend aristocrats are companies in the technology sector that have consistently increased their dividend payments for at least 7 consecutive years, a lower threshold than the 25 years required for traditional S&P 500 dividend aristocrats. This shorter timeframe reflects the relative youth of the technology sector as dividend payers, since many tech companies historically preferred to reinvest profits into growth rather than pay dividends. Companies that qualify for this category have demonstrated a commitment… Read More
Ten Guru-Approved Stocks With Improving Fundamental Momentum – Validea's Guru Investor Blog
Fundamental momentum represents a company’s improvement in operational performance and financial health over time, as measured through changes in key metrics like return on equity (ROE), operating margins, and other fundamental indicators. Unlike price momentum, which looks at historical stock price movements, fundamental momentum focuses on the underlying business performance trends. According to Huang’s research in the Twin Momentum paper, companies showing positive fundamental momentum – specifically those with improving ROE over the previous four… Read More
Building Intelligent Alpha Portfolios with ChatGPT | Doug Clinton – Validea's Guru Investor Blog
In this episode of Excess Returns, we sit down with Doug Clinton of Intelligent Alpha to explore the fascinating intersection of AI and investment strategy. We discussed how Doug is using large language models (LLMs) like ChatGPT, Claude, and Gemini to build portfolios that aim to beat the market over time. Doug shares insights from his experience launching managing AI-powered investment strategies. We dive deep into how these models actually work behind the scenes, exploring… Read More
Ten Top High Free Cash Flow Yield Stocks – Validea's Guru Investor Blog
High free cash flow yield stocks represent companies that generate substantial cash relative to their market value, creating several compelling advantages for investors. These companies typically demonstrate strong operational efficiency and have proven their ability to convert revenue into actual cash flow after accounting for capital expenditures and working capital needs. This financial strength often provides companies with greater flexibility to fund growth initiatives, pay down debt, or return value to shareholders through dividends and… Read More
Ten Fundamentally Sound AI Stocks – Validea's Guru Investor Blog
The transformative power of Artificial Intelligence extends far beyond technology – it’s reshaping industries, consumer behavior, and the very fabric of modern business. As AI continues to dominate market sentiment, companies at the forefront of this revolution have not only fueled impressive stock market gains but are positioned to be key drivers of economic expansion in the decades ahead. To identify the most fundamentally sound AI-focused stocks, we’ve applied our comprehensive consensus ranking system, which… Read More
Practical Lessons from Warren Buffett | Timeless Wisdom from the Oracle of Omaha – Validea's Guru Investor Blog
In this episode of “Two Quants and a Financial Planner,” we break down some of Warren Buffett’s most important investing lessons and life wisdom through a series of interview clips and annual meeting footage. We start by discussing whether Buffett truly deserves the “GOAT” (Greatest of All Time) title in investing, drawing some interesting parallels to NFL running backs like Barry Sanders and comparing different investing legends’ careers. We analyze Buffett’s key principles including: Throughout… Read More
Validea's Top NASDAQ 100 Stocks - January 2025 – Validea's Guru Investor Blog
With the strong performance of the NASDAQ 100 in recent years, valuation has become an issue for the index. But that doesn’t mean there isn’t value in some of the names within it. Using Validea’s factor screening system, which incorporates 22 different investment strategies modeled after legendary investors like Warren Buffett and Peter Lynch, as well as proven academic research – Validea has identified several NASDAQ 100 companies that still demonstrate strong fundamental value. Here… Read More
Validea's Top Ten Technology Stocks - January 2025 – Validea's Guru Investor Blog
Technology stocks have had a great run. But that doesn’t mean there aren’t stocks within the universe that are still fundamentally sound and represent attractive values. Using Validea’s scoring system, which ranks stocks using 22 fundamental strategies based on legendary investors like Warren Buffett, Peter Lynch and Martin Zweig, we have identified a group of technology stocks that offer fundamental value. Here are the top 10 technology stocks for January 2025 ranked using Validea’s guru… Read More
Validea's Top 10 S&P 500 Stocks - January 2025 – Validea's Guru Investor Blog
The S&P 500 has had a big run in recent years, led by the biggest tech stocks. But investors often forget that there are many other companies in the index besides the biggest name. And many of those names offer significant value based on their fundamentals. Using a screening system that incorporates 22 different investment strategies – modeled after legendary investors like Warren Buffett and Peter Lynch, as well as proven academic research – Validea… Read More
Beyond the Magnificent Seven | Liz Ann Sonders on Markets, Cycles & Investing – Validea's Guru Investor Blog
In this episode of Excess Returns, we sit down with Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, for a wide-ranging discussion about markets, the economy, and investing. We explore her unique perspective on the current market environment, including her views on the end of the “Great Moderation” era and the transition to what she calls the “Temperamental Era” – a period likely to bring more volatility in both inflation and economic growth. Liz… Read More
Validea's Top 10 High Insider Ownership Stocks | January 2025 – Validea's Guru Investor Blog
Insider ownership, particularly among executives and directors, is a crucial indicator for investors as it creates a direct alignment between management and shareholder interests. When company leaders have significant skin in the game through substantial stock ownership, they’re more likely to make decisions that benefit long-term shareholder value rather than focusing solely on short-term metrics or personal benefits. This alignment means insiders will feel the same financial impact of their decisions as other shareholders, whether… Read More