Analyzing a Portfolio of 6 Out-of-Favor Stocks...

Mitchell Mauer  |

Tim Dawson via Wikimedia Commons

Here’s a breakdown on how the Enterprise Multiple Portfolio is performing.

Since beginning this Shadow Stock Portfolio on July 7, 2016, the total return is -2.18%.

Here’s what the portfolio owns and its returns so far:

Stock 1:

Stock 2:

Stock 3:

Stock 4:

Stock 5:

Stock 6:


As discussed here, The Stock Market Blueprint is building and tracking a Shadow Stock Portfolio for each Premium stock screen featured on the site.

The purpose of the shadow stock portfolios is to show investors how systematic investment strategies can be implemented using the stock screens featured on The Stock Market Blueprint.

Additionally, the Shadow Stock Portfolios are establishing track records for the strategies being implemented. These records provide actual investment results in real-time.

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The Enterprise Multiple finds undervalued, out-of-favor stocks that are ripe for activist takeovers. This strategy measures a company’s valuation based on its enterprise value to EBIT, rather than the more common ratio of market capitalization to net earnings.

Where market capitalization is the value of a business’s equity, enterprise value includes equity plus debt less cash. It is the cost to acquire the entire company.

EBIT is earnings before interest and taxes. Using EBIT in place of net earnings provides a clearer picture of a company’s operating profits. By not including interest or taxes, the metric compares the operational structure of the business, rather than letting a company’s financing and tax statuses affect its profitability.

See a more detailed explanation of the screen here.

By investing blindly based on what stock screens tell you to, rule-based investment strategies eliminate human emotions from the decision-making process.

Follow along every week to see the performance of a different featured Shadow Stock Portfolio. Each strategy is highlighted every eight weeks.

This article appeared first on The Stock Market Blueprint Blog.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

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