The Undervalued Opportunities investment strategy is suited for long-term investors that are seeking concentrated exposure to growth investments. It seeks absolute returns that attempt to beat the S&P 500 over the long term.
The strategy usually seeks to buy well-known growth companies with strong, recognizable brands.
I will also short stocks in an effort to profit from potential declines when my research suggests that individual growth stocks are overvalued.
My goal is to do no worse than the S&P 500 during market declines and to outperform it in strong market uptrends.
I seek to buy market-leading growth companies when I believe that stocks are temporarily unpopular. My goal is to buy ahead of improving revenue and earnings. I watch for multiple signs of potential improvement, such as company hiring practices, stock buybacks or new product announcements. Then I make detailed estimates on how much the potential improvements can boost a company’s financial results.
I look for multiple potential signs of weakness before I make a decision to short an individual stock. Then I estimate how far a company may fall short of financial expectations.
My investment strategy also uses moving averages and market indices to help guide when it’s time to add to or subtract from existing positions.
Buy and sell decisions are based on a bottom-up process that begins with modeling the earnings and growth rates of potential investments.
I seek to buy positions when my long-term estimates are higher than the average of analysts studying that same company. Conversely, I tend to sell or short positions when my long-term estimates are far lower than the rest of the crowd.
I attempt to own a concentrated group of about 10 holdings. I usually keep each position at or below 25% of the portfolio. The strategy will sometimes use leverage in strong uptrending markets. It will change to a short bias when market conditions for growth stocks begin to deteriorate. All holdings are frequently reviewed based on both fundamental and technical measures.
I tend to sell long positions when I believe the company is unlikely to meet long-term earnings and revenue estimates. I also may sell when a position reaches an uncomfortably high concentration within my portfolio.
All holdings are reviewed frequently based on both fundamental and technical measures. Stocks that offer poor risk-reward based on my preferred parameters are sold.
The portfolio may hold an occasional ETF in order to take advantage of an entire sector or region.
Past performance is no guarantee of future results.
Performance of the portfolio manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions, and broker commissions. Manager returns include trades that fail Covestor's trading rules, do not reflect any Covestor suitability or risk score restrictions and are exclusive of Covestor fees. More
Average subscription returns ("Avg Sub" or "Avg Client") are calculated by Covestor and are composed of the average, daily, time weighted returns of all active subscriptions to the underlying portfolio. These daily average returns are then linked together for the timeframe requested. In addition, these returns include cash, dividends and earnings distributions, brokerage commissions, Covestor advisory fees, and reflect individual client suitability and risk score restrictions. More
All graph data is as of the end of day for the referenced period, unless otherwise specified. The subscription minimum is the minimum subscription required to follow a particular portfolio. The minimum amount is determined by Covestor, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. Variables such as corporate actions or foreign exchange may affect daily performance displays. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither Covestor nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations. Benchmarks presented are total return and therefore inclusive of cash, dividends and earnings distributions but not transaction costs.
Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.
All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of Covestor has been provided by the Portfolio Manager. Covestor makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Covestor. Transaction history is available upon request. Portfolio classifications (Approach, Asset Class) are provided by Covestor, and are intended to serve as a general guide.
These securities are currently held in the portfolio manager's brokerage account. Holdings in the "Replicable Holdings" table currently pass Covestor's trading rules, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription holdings may vary.
These transactions were executed in the portfolio manager's brokerage account. Those marked as "Replicable Transactions" passed Covestor's trading rules and were eligible for replication at the time of execution, subject to individual client constraints. Eligibility for replication may change over time. Actual client subscription trade activity may vary.