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Showing posts from August, 2018

Looking for Value, Part 3, Analysis on the Telecom Majors

Sorry I didn't get right on this after the 21st, I meant to publish this final section on the 22nd, but some life came up.

As mentioned on Tuesday, I'm going to look at Telecom Majors to see if anything looks good.  This analysis will be in three parts: an analysis on year over year growth in earnings, a quality of earnings review and valuation using Ohlson Clean Surplus.  I discussed the latter two on Seeking Alpha and published links on this blog.  For convenience the links are in this article too.

Year over Year Growth in Earnings
This calculation looks at how many years the company has been able to achieve year over year growth in its earnings per share.
What the graph below shows is the number of times the company has grown its earnings with respect to its previous year.  The maximum score is six.

T and SHEN have done fairly well with a score of four each.  What I want to check next is how reliable those earnings results are.  For that I use the quality of earnings.

Quali…

Looking for Value Part 2b) Which Industry Within the Sector?

The next part of this analysis will determine which of the three industries look the most promising from a value perspective.  I'll then do a more thorough analysis on it.

Methodology

Within each industry I'm going to compare the earnings per share growth to the change in price and then take an average.  I'm looking for the industry that has had the highest EPS growth but the smallest share price growth.

Telecom Majors

SecurityEarnings Per Share - Fiscal Period (Y)Earnings Per Share - Fiscal Period (Y-3)Price (Current)Price (M-36)3 YEAR CHANGE IN EPS3 YEAR CHANGE IN PRICEVZ7.362.4254.7946.012.04130.1908T4.76521.1933.0333.23.0044-0.0051SHEN1.330.69537.4519.3450.91370.9359CNSL1.070.345812.0719.512.0943-0.3813BCE2.40372.698241.5440.44-0.10910.0272ALSK-0.12-0.061.632.221-0.2658ATNI1.94252.938273.5371.45-0.33890.0291CBB0.581.55133.43-0.62582.7901Average0.99748750.4151125
Telecom Specialty
I had to remove a bunch of securities from the portfolio - most because they're now pr…

An Interesting Infographic

Courtesy of: Visual Capitalist

Looking for Value, Part 2a) The Industries

I'm looking at the the industries that make up the telecom sector in this phase of this top-down analysis,  .

The INVRS software divides the sector into three industries: wireless, major and specialty.  The sector has close to 500 securities.

When I create a portfolio for analysis, I use the "advanced search" feature on the research dashboard page which gives a list of every publicly company in North American in the particular industry and sector I'm looking at.  I then weed out micro-cap companies and ones not trading on an American exchange (this is a US analysis).  From this smaller list I read the profiles of each company and remove those who operate in a different jurisdiction.

Here are the peer groups:

Major Telecom Peer Group:Stock Name (Symbol)Last PriceMarket CapVerizon Communications Inc.(VZ:XNYS)$52.47216.8027BAT&T Inc.(T:XNYS)$32.26234.1997BShenandoah Telecommunications Company(SHEN:XNAS)$36.001.7841BConsolidated Communications Holdings, Inc.(CNSL:XNA…

Looking for Value After a Nine Year Bull Market - A Live Analysis, Part 1

Below are 22 sector graphs based on the S&P Total Market Indices.  There are a couple missing - Aerospace/Defense (which could be in capital goods) and real estate.  I'll add them when they become available, but there is more than enough to start with. I'm looking for a sector that's lagged behind the S&P, something out of favour. A visual review shows me that Energy & Telecommunications fit the bill.  I'm going to focus on Telecommunications.  Energy is down relative to its starting point but Energy is highly volatile and I did an article on Energy a few months ago.  I haven't put the link in this blog yet, but if you are interested you can find it on Seeking Alpha. If you click into the three horizontal lines at the top right of the chart there's the option to get a data table.  Using that I can see on March 10, 2014 the first data point for Telecommunication, the index had a value of 1335.27 and the S&P had a value of 1877.17.  On August 7, …

Gold Part 3, Canadian Perspective

Here's the final installment of the gold series published in Seeking Alpha.  This one covered Canadian stocks.

Article.

Part of the article series was a regression analysis against an S&P/TSX Global Gold Index, which is based on the price of the underlying member stocks.  I'd change that and use a better gold price indicator, like the gold monthly price supplied by index mundi.

AI, Machine Learning and the future of INVRS

Artificial intelligence and machine learning are two areas that hold great possibility in the field of finance and investing. 

Right now there are AI driven ETFs that consume huge amounts of data, learn from it and and then constantly re-balance a portfolio of securities designed to out-perform the market.  It's a fascinating frontier.

How will INVRS adopt this technology while still remaining true to our vision of empowering human analysts?

INVRS was founded on the notion of using technology to automate or make some of the more grueling, time consuming tasks easier, but still keep a human in charge of the creative elements of analysis.

Here are some of the avenues we may develop or are developing currently:

1) Allow users to back-test models to determine efficacy across stocks, industries and the broad market.  We expect that our users will find some of their models work better under certain circumstances and with certain industries.  This knowledge will help them select the &quo…