10 Mid Cap Magic Formula Stocks – Nov 2019

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Introduction

Magic Formula Stocks have a track-record of beating the market over time. When Greenblatt wrote about the magic formula investing process, he recommended going for stocks above $50 million in market capitalization. At VSG we run our screens with the minimum market cap at $30 million. Other than this, this screen exactly follows Greenblatt's magic formula.

Screen Details

This screen looks for large cap stocks between $2 billion and $5 billion in market capitalization with highest earnings yield and return on capital, as modified by Joel Greenblatt:

Avoid Financials and Utilities
Avoid ADRs
Greenblatt Earnings Yield, pick from the highest
Greenblatt ROC, pick from the highest

We have limited the results to the top 10 stocks. The stocks are ranked with 50% weight to Greenblatt Earnings Yield and 50% weight to Greenblatt ROC.

The screen was run with the Stock Rover screener, and we found 9 stocks listed on the American exchanges that fit this criteria. You can download the filter criteria here so you can import it in your Stock Rover account and run it yourself as you need. Don't have a Stock Rover account? Sign up here for a 2 week free trial. You can read my review of Stock Rover here

The Screen Results

Stock	Company	Sector	Greenblatt Earnings Yield	Greenblatt ROC
AMCX	AMC Networks	Communication Services	16.3%	29.8%
ARNA	Arena Pharmaceuticals	Healthcare	39.0%	64.1%
DLX	Deluxe	Communication Services	9.9%	53.5%
EAF	Graftech International	Industrials	17.6%	70.5%
HRB	H&R Block	Consumer Cyclical	12.3%	36.9%
PINC	Premier	Healthcare	16.5%	42.9%
QRTEA	Qurate Retail	Consumer Cyclical	12.9%	26.9%
SBH	Sally Beauty Holdings	Consumer Cyclical	11.9%	31.3%
TGNA	Tegna	Communication Services	9.9%	51.4%

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Access all our stock screens here

Notes and Observations

The Magic Formula Screener is non-discretion based. This means you just pick the top stocks and buy them mechanically. If this is what you want to do, just use the stocks listed above. If you wish to add a little bit more discretion, you can run these stocks through an additional filter.

Ending Note

I have added all 9 stocks for further review. We used to own Tegna when it was Gannett and we made a nice profit then. Much has changed since then in the business and it will be nice to get back into the details.