Stocks in our model portfolio tend to presage major sell side analyst actions
35 Stocks for October 2017 Details of the latest model portfolio rebalancing may be found in our report, 35 Stocks for October 2017.
Model Portfolio Stocks Tend to Presage Ratings and Price Target Changes Stocks in our model portfolios tend to presage sell side analyst price target and ratings changes.
In other words, stocks selected in the long model seem to be often followed by subsequent upgrades, and stocks in the short sale model seem to be followed by subsequent downgrades.
This makes sense given that our model portfolio is composed of stocks demonstrating fundamental momentum to the upside or downside. By definition, momentum tends to be followed by additional momentum in the same direction.
When momentum fails, or simply experiences relative weakness, the stock is rebalanced out of the model portfolio.
Advanced Energy Industries Recently Upgraded by Needham Advanced Energy Industries, Inc. (AEIS) experienced a price target raise from Needham and is now leading the long model with a +6.38% return since the October 5 rebalancing.
Also of Note, Trinseo Reports Better Than Expected Preliminary 3Q17 Trinseo (TSE) reported better than expected preliminary 3Q17 results and raised guidance for 2017. The stock is up +3.03% in the long model.
Sell Side Upgrades and Downgrades Since October 5 Rebalancing The table below is a compilation of all sell side actions that we are aware of that have impacted our model portfolio stocks since the latest October 5 rebalancing.
October 2017 Returns to Date For the month to date of October 2017, the Core Long Model portfolio is up +1.42% on a simple cumulative return basis. This is ahead of the S&P 500 up +1.34% and the S&P 1500 Composite up +1.31%. The Core Long/Short Model is up +0.64%.
Our theoretical model portfolio is useful as a long-term stock picking list as well as a trading benchmark We rebalance our model portfolios every month. We also track 1-year returns of each rebalanced model, which have tended to do very well. We will post the one-year theoretical returns in a later note.
Please follow this link to our latest model portfolio update for a list of long and short sale model portfolio stocks, short-term price targets, as well as MTD returns since the last rebalancing action.
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Equity research and financial modeling consulting We provide independent equity research, budget forecasting, startup and corporate valuation, or general financial modeling consulting services, please contact us “steve at ascenderellc dot com” or via LinkedIn,
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