- We think an investment strategy that combines quality and value is the best opportunity for generating compounding total returns over an extended holding period.
- In this installment of our series, Finding Value, we share our three favorite multiples that screen for the undervalued stocks of otherwise quality enterprises.
- As a bonus, we share five current holdings in the Main Street Value Investor Large-Cap Total Return model portfolio that were initially uncovered by our preferred ratios.
A seemingly endless bull market tests the thoughtful, disciplined, and patient value investor as bargains become scarce. Those who compromise and join the herd in scooping up overpriced growth stocks or poor quality value traps on the fear of missing out - aka FOMO syndrome - come to regret the purchases when the market ultimately retreats.
At Main Street Value Investor, we uncover price/value opportunities without the need for the typical Wall Street prerequisites of an Ivy League MBA, sophisticated financial models, or trading algorithms by targeting our due diligence on five key fundamental areas.
Our preferred scope of research and analysis are the company's value proposition, shareholder yields, returns on management, valuation multiples, and downside risk. We then add a pinch of common sense.
In this second of our series, Finding Value, we focus on valuation multiples, particularly our favored three ratios and five undervalued stocks of quality companies in our proprietary Main Street Value Investor Large-Cap Total Return model portfolio that were discovered using this preferred valuation matrix.