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AFG HOT STOCKS SIZZLE - August Stocks to Buy and Sell

Fri, 08/14/2009 - 12:12pm
Category: Stock Insights
Related: AMT, AOC, BEN, CERN, DELL, DRI, EXPD, FLR, HPQ, IRM, JDSU, KR, MHS, MWW, NOV, NYT, PCG, QCOM, TORLX, WLP

In yesterdays article we provided an update of the performance of our annual HOT STOCK LIST:

Hot Stocks Update

We also provided an update of the performance of the Toreador Large Cap Fund, TORLX which uses AFG’s Economic Margin Framework as part of its investment philosophy.

As you may note, both have done very well!

Today we decided to provide a Buy/Sell list to VE’s registered visitors applying some of these same investment principles: Economic Margin, Management Quality, and a company's Percent to Target (the deviation between a stock's current trading price and its current default target price according to AFG).

Below is a preview of the list which includes a Buy/Sell Recommendation on each Stock. The complete list, accessible to Value Expectations registered users, contains around 500 Stocks.

S&P 500 Rank (Preview) - August 11th 2009
Ticker Company Price Recommendation
DRI DARDEN RESTAURANTS 32.61 Strong Buy
KR KROGER CO THE 20.93 Strong Buy
WLP WELLPOINT INC 51.9 Strong Buy
AOC AON CORP 40.55 Buy
FLR FLUOR CORP 57.49 Buy
PCG PG&E CORP 40.36 Buy
AMT AMERICAN TOWER CORP 32.37 Neutral
IRM IRON MOUNTAIN INC 28.85 Neutral
NOV NATIONAL OILWELL VARCO 37.1 Neutral
BEN FRANKLIN RESOURCES INC 92.13 Sell
EXPD EXPEDITORS INTL WASH INC 33.04 Sell
QCOM QUALCOMM INC 45.74 Sell
JDSU JDS UNIPHASE CORP 5.93 Strong Sell
MWW MONSTER WORLDWIDE INC 14.9 Strong Sell
NYT NEW YORK TIMES 8.1 Strong Sell

Source: The Applied FInance Group

To download the complete list click here.

A brief description of AFG's buy criteria variables:
 
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.
AFG's Value Universe - Companies in the AFG universe, which have MV/IC at the bottom 50% of the universe and have EPS estimates.

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