This screen is loosely based on the "Cash Index" approach outlined by James Altucher in his book, "Trade Like Warren Buffett". He suggests a multi-pronged approach to analysing potential bargain/arbitrage stocks in times of market distress (post 2001 bubble / Iraq War). First of all, he suggests that it's important to recognise that these stocks are likely to be trading for less than cash for a reason, namely the market thinks they will eventually declare bankruptcy. Some of the possible risks include: i) Inaccurate reflection of "cash on hand" in their books (leases, severance packages, etc), ii) Business model destined to fail, iii) Management with no incentive to return value to shareholders. To minimise risk of buying a turkey, Altucher looks for eight factors: i) Market cap below cash, ii) Very low leverage, iii) Enough cash headroom to cover the current annual burn-rate, and iv) some stability in revenues and earnings. In addition to these easily-screenable criteria, he suggested looking out for more qualitative factors: v) A reasonable belief that the sell-off in the stock was partly irrational, vi) Favorable arbitrage analysis - , i) Insider buying and viii) Institutional ownership. To learn more about this strategy please click here »
American hedge fund manager, author and blogger.
Trade Like Warren Buffett
by James Altucher
In his book, "Trade Like Warren Buffett", Altucher indicates that his basket of stocks was up over 100% over six months, "as the market not only jolted upwards in the aftermath of the Iraq War but also began to realize the value of the cash portfolios of these companies". The long-term performance of this screen - and its performance in more benign market conditions - is unknown.
This screen is based on a UK dataset.
It uses the following criteria:
Results are sorted by:
And limited to the first 200 Results
| Timeframe | Screen Returns | FTSE 100 | Outperformance |
|---|---|---|---|
| 1 week | 2.66% | -0.50% | 3.2% |
| 1 month | 3.43% | 3.87% | -0.4% |
| 3 months | -1.40% | 5.03% | -6.4% |
| 6 months | 13.64% | 14.35% | -0.7% |
| 1 year | 9.53% | 26.35% | -16.8% |
| Since inception | 14.79% | 24.0% | -9.2% |
| Annualised | 10.03% |
| Maximum Drawdown | -21.63% |
| Average No. of Holdings | 15.4 |
| Diversification Level | Good |
Chart based on an equal weighted portfolio of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.
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Can't see the share you expect? View this screen as a checklist to find out why.
