By Alpesh Patel, Total Wealth Research, 2024-07-18
Making money in the stock market doesn't have to be complicated.
Look for companies with solid growth, good valuations, and steady income. (Like the kind my GVI system pinpoints.)
But with the S&P 500 hitting new high… after new high… after new high… why not take a bet on the market itself?
That's what I'll show you in this week's Dealmaker's Diary.
This global financial services company has nearly half a trillion in assets under management… and has been investing for its clients for 90 years.
But you know that's only half the story when I look at a stock.
The numbers look good too… with volatility below 20%… a CROCI of 7.5%… and a forward P/E of just 11.8.
And the stock's momentum points to a breakout back to all-time highs.
Did I mention it also pays a solid dividend?
Get all the details on this investing powerhouse – including its ticker JHG – in my latest video.
Click on the image below to watch it.
TRANSCRIPT
Hi, Manward family, and GVI Investor subscribers.
Here's the big reveal for the Stock of the Week from the Dealmaker's Diary.
It is Janus Henderson (JHG), and it's an unusual one for a couple of reasons.
I haven't done a financial services company for a while. And it's a company about the stock market.
But it is also a multibillion-dollar asset management company. It's set to go in a pretty attractive direction.
On my proprietary Growth-Value-Income rating, it's an 8 out of 10. Remember, anything which is a 7, 8, or 9, or even a 10 meets my minimum criteria, where I weigh valuation against growth against income.
We add all those up and we get a score.
The forecast P/E is 11.8, which means you're paying 11.8 dollars for every forecast or expected dollar in profits. Not the cheapest, not the most expensive. It's fine.
For CROCI – cash return on capital invested – I want companies in the top quarter. Whilst this isn't ideal and perfect, 7.5% is pretty good on that number.
Remember, companies in the top quartile generally generate 30% per annum as a basket on average over the long term. You can see why it's so successful here.
Sortino is 0.01. Volatility is below 20%, which is my ideal sweet spot.
Now, when I'm looking at companies, I will look at previous upward trends. I will look at their worst drawdowns in those upward trends, and I will assume that that depth and duration will repeat itself as soon as I bite. And if I'm not comfortable with that, then I won't have it.
Another thing I'll do is look at the gradient. What if that gradient were to continue from here for the next 12 months? Will that give me the kind of return I'm looking for?
And over the next 12 months, that would take Janus above its all-time high. Hopefully get it to about $50. Does that give me the return that I want?
Now, given this rising monthly MACD, we look set for all of those things.
Of course, the market isn't mathematics or physics and doesn't quite work as easily as that, but given all the fundamentals and the technicals, we've looked at quite a good few things which tick a lot of boxes.
Discount cash flow shows the stock is 15.5% undervalued.
That's not the most accurate way of measuring the valuation of a company. However, it's not bad. So it gives an additional comfort.
Hope you're comforted by this presentation as well.
Thank you all very much.
The post <em>Dealmaker's Diary</em>: Get Paid to Play the Stock Market appeared first on Total Wealth Research.
