John Dorfman Columns category, Page 11
John Dorfman: This investing strategy has doubled S&P 500’s returns over 21 years
Over the past 21 years, my Robot Portfolio, a naive stock-picking paradigm, has more than doubled the return on the Standard & Poor’s 500 Index, the gauge most professionals use to track the performance of the U.S. stock market. The cumulative returns: 1034% for the Robot, 379% for the S&P...
John Dorfman: Disney, Oshkosh among best stocks for 2020
If you’re doing a portfolio refresh for the new year, here are 10 stocks that I think deserve strong consideration. Most of them sell for 16 times earnings or less, in a market where the average multiple is about 23. They all have low debt or reasonable debt, in my...
John Dorfman: Insiders buying at Matador, Berry Petroleum
Investors loathe energy stocks, which are down more than 40% since their peak in June 2014. A 2018 rebound proved to be a sucker rally. Two CEOs of small energy companies are defying the trend, buying their companies’ shares recently. Joseph Foran, the CEO of Matador Resources Co. (MTDR), spent...
These stocks could bounce high in January and beyond
Energy stocks, and to a lesser extent bank stocks, have been the market’s whipping boys in 2019. Now they are being punished anew, as investors sell shares to establish tax losses. In the fall frenzy of tax-loss selling, certain stocks are often pushed below their intrinsic value, and that is...
Met Life, Oasis Petroleum selling below book value
What do Met Life, Kelly Services and Oasis Petroleum have in common? Each is selling below book value. Book value is a company’s net worth (assets minus liabilities), usually expressed as a figure per share of stock outstanding. Buying stocks below book value is a classic bargain hunters’ strategy. Here...
5 large-cap stocks are up more than 100% this year
The U.S. stock market’s hottest stocks this year have mostly been youngish companies with little if any profit history. Investors these days are talking conservatively, but investing speculatively. Among the 535 U.S. stocks with a market value of $10 billion or more as of Nov. 1, five have returned more...
Take a look inside John Dorfman’s ‘Billion Dollar’ Portfolio
Is there a perfect size for a stock? Perhaps not. Size doesn’t matter — at least, not as much as profitability, growth and valuation. And yet, there is a size to which I am particularly partial. It’s right around $1 billion. To me, that is the dividing line between small-capitalization...
Purloined Portfolio a collection from bright minds
Stolen fruit, anyone? Filings with the Securities and Exchange Administration make it easy to follow what almost any U.S. money manager is doing with his or her portfolio. I like to keep tabs on what my competitors are doing, especially the competitors I respect. Once a year, I feature some...
Marathon Petroleum and Prudential have dividend appeal
With impeachment and trade war in the air, the stock market probably won’t roar ahead in the next 12 months. Anything can happen, but my guess is that the coming 12 months will see a normal gain of 10% or less. In that environment, wouldn’t it be nice to have...
John Dorfman: Diamondback, Oshkosh make the Casualty List
Stocks that are wounded often make the best buys. That’s why I compile a Casualty List each quarter of stocks that have landed in the market’s hospital — and that I think have outstanding potential to recover. The list you are about to read is the 66th one I’ve done...
John Dorfman: How about owning a few stocks outside the U.S.?
If the U.S. stock market falls — whether because of the impeachment battle, the trade war with China or slowing corporate profits — stocks outside the U.S. won’t necessarily do better. Then again, they may. Diversifying your stock portfolio by putting a slice of it in companies based outside the...
John Dorfman: Retired farmer wins big in short-selling contest
Lloyd Dawson, a retired farmer from LaVista, Neb., beat a strong field to win my 16th annual “Short Sellers Don’t Have Horns” short-selling contest. Short selling is a technique for profiting from a stock’s decline. It is difficult since the market rises more often than it falls. It is also...
John Dorfman: Pfizer and Norfolk Southern flaunt fat profit margins
A fat profit margin can signify one of several things. A company may have a big margin for two reasons. It may have first-mover advantage in a new field. Or it may provide something that people strongly want, whether that be a smartphone or a tasty chicken sandwich. Either way,...
John Dorfman: Micron, Allstate have value plus momentum
Newton’s first law says that a body in motion will maintain a constant speed and direction, unless acted on by an outside force. Momentum investors think a similar law applies in the stock market. If a stock has advanced strongly in the past month, or the past 52 weeks, they...
John Dorfman: Another tool for your investment toolkit
“Scalpel please, nurse. Clamp … sponge.” A surgeon needs a variety of instruments. Investors should use a variety of tools, too. One tool is underutilized by individual investors is the price/cash-flow ratio. How cash flow works Cash flow attempts to measure the actual money coursing through the arteries and veins...
Fire-free zone in war between growth and value
For more than two decades, I’ve been a value investor. In recent years, that’s been a handicap. Growth investors are running the table. Growth stocks have beaten value stocks in seven of the past 10 years, winning by a large margin in the past two years. The trend continued in...
Biogen, four other stocks show rapid revenue growth
Let’s hear it for the top line. The investing public worships at the bottom line — profits. But for sustained growth in profits, a company needs growth in the top line — revenue. You can’t cost-cut your way to riches indefinitely. Rapid revenue growth indicates public demand for a product...
John Dorfman: Here’s a different way to find cheap stocks
A telescope is a fine instrument, but not if you need a microscope. In the stock market, as in science, there are different instruments for different purposes. For finding cheap stocks, the most common gauge is the price/earnings (P/E) ratio – a stock’s price divided by the company’s per-share earnings...
John Dorfman: Here’s my Perfect 10 Portfolio
Perhaps the phrase “Perfect 10” makes you think of a beautiful woman, or a perfect score in gymnastics. Well, my Perfect 10 Portfolio is a little different. It consists of 10 stocks, each of which carries a price/earnings ratio (P/E) of 10. The P/E is simply a stock’s price divided...
John Dorfman: Gentex, National Beverage among high-profit, low-debt stocks
How many efficient-market theorists does it take to screw in a light bulb? Punchline: None, because if the light bulb needed to be changed it would already have been done. The efficient market theory states that — since stock investors instantly incorporate all known information into stock prices — your...
John Dorfman: Here are the stocks I own
I recommend about 250 stocks a year in this column, but usually hold only about 25 stocks in a typical client portfolio. Naturally, readers ask from time to time, “Well, what do you actually hold?” So, once a year in this column I report on the holdings in my firm’s...
John Dorfman: Harold Hamm buys yet more Continental Resources stock
Harold Hamm, 73, is a multibillionaire, a major Republican donor and a pioneer in shale drilling in the Bakken formation (located in North Dakota, Montana and adjacent parts of Canada). Hamm has a big appetite for the stock of Continental Resources Inc. (CLR), the oil-and-gas company he runs. He snapped...
John Dorfman: Molina and Great Lakes have jumped, still look good
When a stock jumps 50% or 100% in a year, you know something is afoot. Maybe the company is firing on all cylinders. Maybe the stock was radically mispriced a year ago. Perhaps both. Once a year, around this time, I select a few stocks that have exploded upward and...
John Dorfman: 4 stocks with tiny debt or none at all
Low debt is a characteristic I love when picking stocks. The low-debt stock list you are about to read is the 17th in a series, published pretty much every year in May. My picks in the first 16 low-debt lists have averaged a total return (including dividends) of 28.5% in...
John Dorfman: 5 stock choices from my ‘Old Faithful’ screen
My “Old Faithful” stock screen is one of my favorites. I’ve written 16 columns about Old Faithful, beginning in 1999. The average one-year gain has been 19.99%, compared to 6.33% for the Standard & Poor’s 500 Index over the same periods. Figures are total returns including dividends. Twelve of the...
