저자: Colton · 외국인
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Joel Greenblatt의 'The Little Book That Still Beats the Market' 전략(ROIC 고수익·이익수익률 고평가 저평가 종목 매수)을 재조명. 저자 주장으로 1988~2004년 연 30%대 수익률 제시(시장 12.3~12.4% 대비). 현재 시장은 PER 약 28배로 비싸고 10년물 국채 약 3.75~4%와 비교해 주식 매력이 낮다고 평가. 개별 종목 선별 시 ROIC·이익수익률·재무건전성·경영진 신뢰를 기준으로 삼겠다고 밝힘. 예시로 Janus International(JBI) 등 저평가 종목을 소개하고 추가 모델링 예정.
다듬은 글
with markets hitting new fresh all-time highs I figured let's go back to the drawing board let's dumb some things down and let's talk about an author hedge fund manager Mr Joel greenblat now if you're not familiar with Joel greenblat he's the author of one of my favorite books one of the quickest read you'll ever see and a great introductory when it comes down to individual stock picking that is called the little book that still beats the market I Revisited it this weekend and it made it more clear that I need to share this with people as it is getting harder and harder to really dig through and sift through opportunities and using simple methods that Joel breaks down in this book has been a proven track record to actually outperform the markets netting over a 30% compounded rate of return while the market average was at 12.3% and the S&P 500 was at 12.4% and this wasn't a 1 to 2year fluke as we see here that goes from 1988 to 2004 of a consistent method that proven to outbeat the market now in this book Joel talks about having a process and being patient because it's not going to happen overnight it might take 3 to four years for your stocks to really start outperforming but if you stick to this methodology and it actually comes down to valuation valuations really do matter when it comes down to getting a return on your investment it's as simple as buying low and selling high but how do we know when we're buying low and how do we know when we're selling high so what do these averages mean from a per dollar standpoint well let's just say you had $10,000 to to invest your monthly contributions are $1,000 a month length of time will just use 20 years estimated rate of return will just use 133% which is pretty close to what the market was producing during Joel's experiment we'll use a 20% variance well in 20 years you wouldd have almost $1.1 million but now if we just change that interest to right around 31% the compounded rate of return that Joel was receiving using this methodology well we could see here that turns into 10 million $750,000 a huge huge disparity that goes to show that compounding interest is definitely one of the most wonderful things that the world has to offer now of course we want to be on the right side of that compounding interest not on the down side of that compounding interest but we can see the disparity here that's an increase of nearly $9.6 million of generational wealth creation just by being patient having a process and picking quality individual stocks that go on sale he would only really use two things here number one would be return on invested capital and number two would be the earnings yield now in order for the earnings yield to be high that means the PE Ratio essentially needs to be low we want to be looking at PE ratios in certain sectors that are trading well below their peers but the company is deploying Capital at a high rate of return this usually leads to outsides gains now of course in this example Joel does talk about sometimes things can go wrong and you can't put all your your eggsit one basket but if you round up 10 to 15 different companies that are meeting these metrics you should have an outsize rate of return when compared to the market which makes me wonder if this works so well why don't we use it on a consistent basis or at least start out to use it which is now where we're going to be Shifting the Channel first thing we're going to do before we do anything and we actually do this on the channel and guys if you're new to the channel welcome into compounding Capital my name is Colton we do fundamental analysis on this channel along with long-term price action and so that is why I do have a soft spot for this book and and it was nice to kind of go back to a book that I read a long time ago and revisit some of the things that are taking place today because in this market to me things seem a little expensive things seem a little euphoric and it's getting harder and harder to read between the lines and be patient and wait for your opportunities to present themselves when I look at this Market I don't see anything that's a screaming deal now there are some deals but you have to do some digging one of the things I love about this book is Joel talks about the risk free rate looking at a treasury that's yielding 3.75% is really not that enticing and so we're seeing more and more people enter the stock market inflating the price but now it's becoming a rock in a hard place because well you're only going to get 3.75% in a 10-year Treasury and now we're looking at a market trading at historical levels pushing over 28 times earnings so this is definitely becoming harder for those individual stock Pickers now of course on this channel I always just recommend dollar cost averaging into a broadly Diversified index said and forget it but we need to talk more about this risk-free rate here with the market trading at nearly 28 times earnings how much higher can it go and when we look at a risk first reward but how much downside risk right now is there in the market if we buy the S&P 500 it can go down 10 20 30 maybe even 40% and could take multiple years to regain those losses when we look at the 10-year treasury yielding nearly 4% this is where we have to talk about the risk premium and that's always going to depend on a few different things what are you trying to accomplish as an investor your time Horizon your risk tolerance and so on and so forth so Joel has showed us that this process does really work but I want to add a few more things here now going forward this is exactly what I'm going to do you do not have to follow me going forward I'm going to be using Joel's rules rule number one high return on invested capital and Rule Number Two High earnings yield for me rule number three is going to be the balance sheet I want to make sure that their cash and their debt is in line and that their free cash flow can handle the debt that they currently have along with that I want a decent free cash flow yield along with a good balance sheet after I see all of that I plug in my analysis we get our stock price and then the last and final thing I actually want to look at is do we trust management that is a huge wild card that has made stocks explode and made stocks fail I think about trusting management to execute I think about Elon Musk I think About Management failing I think about Pat gelsinger right now now of course Pat gelsinger can turn some things around but I'm just using this as an example because it seems that management is extremely important for execution of an individual Equity so you're probably asking yourself how do we find these companies well the first thing we can do is start a stock scanner so I'm just clicking a few things here just to kind of get the ball rolling we have a market cap PE ratio and free cash flow yield two things that are important to us and then we're going to look at how the companies deployed Capital now the big thing we're going to run across is going to be the sector we're probably going to come across a ton of financial sectors because essentially Financial sectors trade off a book value but they have low PE ratio so most likely they're going to be a ton of financial institutes that are going to pop up on our screen because they have pretty good free cash flow yield they have low PE ratios so that's probably going to be one thing we're going to run into a lot when we scan for this now we can look by SE and now we can go to other websites and look by sector but I'm just wanting to show you by example kind of what's going to happen here and we can see the type of Industry they're in we see oil and gas which makes sense because those companies trade for somewhat depressed valuations apparel we all know retails taken a massive hit Banks which we just talked about Asset Management once again in the financial sector so one I want to highlight here and we're going to click on is going to be this Janice International building products and Equipment which I think is an a pretty interesting sector when we think about some of the companies that have actually been outperforming KB Homes companies like Home Depot we think about that consumer we go to a 5-year chart and it's kind of been a cyclical business here ups and downs and it looks like it's on the down but it also looks like it's hitting a price that is normally where we might see some support coming in we take a look at revenue and earnings and take a look at this it's a nice steady incline on earnings and revenue not a straight line up but I would say it is heading in the right direction price target of $132 cents which gives it 29% upside we have two strong buys one buy and two hold so sentiment around the stock is actually pretty decent now take a look at this return on Equity is at 26% return on assets is at 11.4% and return on invested Capital at nearly 133% so we look at a Ford P trading at 12.6 times earnings we see that they're deploying Capital well this one's definitely starting to become interesting the more we dig at it 52e low is $9.7 cents while the 52e high is pushing nearly $16 a share and so when we do a quick pair comparison we can see that it's trading around 12 to 12 and 1 half times earnings while industry standard is pushing over 20 times earnings now of course the next steps for me personally would be plugging it into my model as you guys have seen me do multiple multiple models on this channel and if you haven't be sure to check out one of my videos but I would be plugging it into the model projecting out what I think they can accomplish over the next 5 to 7 years after I build in some safety if the price comes in at a reasonable valuation and it looks like a buy the next thing I'll do is listen to some quarterly reports and go over management and see if they're executing at that point in time this one could be one that gets interesting and we could actually buy so in our next video we're going to do another skin we're going to use Joel's magic formula along with a few things that I added to it and we're going to plug in some numbers and see if we can find some undervalued stocks that could be outperformers as always guys really appreciate your time and we will see you in the next one
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