John Dorfman Columns category, Page 3

Two qualities of outstanding companies are high profitability and low debt. Let’s look at a handful of companies that can boast both. Among the largest 2,000 U.S. companies, about 27% have high profitability, as gauged by a return on stockholders’ equity of 20% or more. About 15% of companies have...

Defying bad news, several chief executive officers bought their own companies’ stock last month. Here are four cases that caught my eye. Skyworks Solutions CEO Liam Griffin spent just over $1 million to buy 11,142 shares at Skyworks Solutions Inc. (SWKS). That brings his total holding to 153,431 shares, worth...

Investors often chase stocks that have soared or plunged. They may overlook stocks that have simply held still. But there are sometimes real bargains in stocks that have done nothing for a while. Each May, I write about such stocks. I call them the Do Nothing Club. Over 20 years,...

Jerome Powell, head of the Federal Reserve, made it official a few days ago. “Higher for longer” interest rates are the policy of the nation’s central bank, and that’s likely to last for at least several months. The cost of carrying debt is biting companies harder than it did in...

The website Gurufocus.com tracks the stock picks and performance of a few dozen famous investors. In the past five years, half a dozen of them had annual returns exceeding 17%. Ron Baron leads the parade. His Baron Partners Fund had a 31.2% annual return. In today’s column, we’ll take a...

You can count on it. Every 35 to 120 minutes, Old Faithful Geyser will erupt in Yellowstone National Park. I’ve named one of my favorite stock screens after this famous geyser. It’s a simple multifactor screen, pointing to stocks that:Boast a 15% return on stockholders’ equity (profits as a percentage...

Waiting for small stocks to stage a comeback is like: (a) Watching grass grow (b) Watching paint dry (c) Watching snails race (d) All of the above The answer of course is (d). This year through April 12, large-capitalization stocks (as represented by the Standard & Poor’s 500 Total Return...

Not every stock that gets roughed up deserves it. Finding stocks that have been banged around, and that have good recovery potential, is the point of my quarterly Casualty List. This year’s first quarter saw healthy gains for most stocks, but some stocks took it on the chin. Four that...

Ever have a friend you love and hate at the same time? That’s how I feel about gold. For most of my 24 years as an investment manager, I’ve avoided gold. Unlike Microsoft or Coca-Cola, gold doesn’t generate any profits. So you can’t use standard measures like price-earnings ratios to...

The Nasdaq Stock Market has been hitting new highs this year. Nasdaq is a market with a dual personality. It’s home to most large technology companies and also the place where a slew of smaller stocks in other industries are traded. Tech stocks have been the stock market’s leaders last...

Predicting the economy is close to impossible. But we have fun trying. Welcome to the 22nd Derby of Economic Forecasting Talent, or DEFT for short. Contestants must predict six economic variables for the calendar year in progress. You can play. The winner will get a trophy, plaque or certificate. Plus,...

Many investors see only half the picture. They are like a baseball scout who looks only for hitting ability, not fielding. They focus obsessively on a company’s income statement (profit and loss), mostly ignoring the balance sheet (assets and liabilities). I believe the balance sheet is important, particularly now that...

A body in motion tends to remain in motion at a constant speed and velocity unless acted upon by an outside force, says Newton’s first law of motion. The stock market is full of outside forces. Nonetheless, the momentum effect is real in the market. That’s why, twice a year,...

If your nose bleeds when you look at the high prices of the market’s most popular stocks, you may find some bargains in mid-sized stocks. I believe mid-capitalization stocks are poised to do well in 2024. I define mid-caps as stocks with a market value of $1 billion to $10...

A Wall Street adage warns, “Don’t try to catch a falling knife.” I do it frequently. Buying good stocks on bad news is a sound methodology, I believe. You may not catch the exact bottom, but you’re likely to find a good entry point. Each quarter, I compile a Casualty...

Well, finally! The stock market’s advance is broadening out at last, after close to two years when most stocks didn’t do much while the so-called Magnificent Seven soared. The Magnificent Seven consists of Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), Apple Inc. (AAPL), Meta Platforms Inc. (META), Microsoft Corp. (MSFT), Nvidia...

As each year draws to a close, I like to sift through the debris of the year’s worst-performing stocks. Usually I can find one or two that strike me as bargains. This year, among all U.S. stocks with a market value of $5 billion or more, the worst performers are:...

“Still going.” That was the punchline in the Energizer battery commercials, featuring the Energizer Bunny, which kept going long after you would have expected it to stop. It’s also the idea behind my Bunny Portfolio. This hypothetical portfolio contains companies that have averaged 25% profit growth in the past five...

When chief executives buy their companies’ shares, it’s often worth considering the stock. Company insiders achieve better capital gains, on average, than the typical investor does. The effect is especially strong for chief executive officers (CEOs) and chief financial officers (CFOs). Using Guru Focus software, I screened on Dec. 3...

Today’s smash-ups are tomorrow’s comeback candidates. In November and December, investors often sell their losers to reduce their capital-gains taxes. In this late-year selloff, some stocks get pushed below their fair values, which creates a buying opportunity. Here are a few stocks that have been pummeled in 2023 and that...

Thanksgiving is a time to loosen your belt. That’s why, each year around Thanksgiving, I loosen my stock-valuation belt a little in this column, and suggest five stocks that look good to me even though they are a little more expensive than I normally prefer. These are GARP stocks. The...

I believe the value approach to investing is in the early stages of a comeback, after a decade in retreat. Roughly speaking and oversimplifying, value was usually a good stock-picking method from 1930 to 2013. Since then, growth and momentum investors have smiled, while value investors have wept. A stock...

Some of the biggest gainers this year are so obscure that many investors won’t have heard of them. On Nov. 4, I checked the biggest gainers year-to-date among all stocks with a market value of $1 billion or more. And the winners are…. 1. Cipher Mining Inc., up 632% 2....

For a while, revenue growth at all costs was a popular approach, and investors fell for it. Now that stocks such as AMC Entertainment Holdings Inc. (AMC) and WeWork Inc. (WE) have crashed to earth, investors are a little less in love with revenue growth. So now that the fad...

I’m partial to small and midsize stocks, and I especially like the size that’s right on the border between them. “Large” in the stock market these days means $10 billion or more in market value, by my classification. Midsize stocks are $1 billion to $10 billion, and small stocks are...