Stock Fundamentals from Buffett, Graham and Greenblatt

Amidst the tumult of today’s markets and economy, making investment decisions can be challenge. A wise approach, according to a recent Forbes article by Validea CEO John Reese, is to turn off all the noise and circle back to fundamentals.


He highlights focusing on the numbers, staying disciplined in your investment approach, and guarding against emotional decision-making as central to his own philosophy and those of gurus that inspire the Validea stock screening models. Using this fundamental-centered approach, Reese identifies the following five picks:

  1. Gamestop (GME) is an omni-channel video game retailer. This stock earns a perfect score under the Joel Greenblatt-inspired screen due to strong earnings yield of 18.27%, and the Peter Lynch-based model categorizes GameStop as a “dividend payer” based on its revenue base of $9.27 billion.
  2. Amtrust Financial Services (AFSI) provides specialty property and casualty insurance products. The Peter Lynch-inspired screening model favors the company’s P/E/G ratio of 0.33, and the Martin Zweig-based strategy gives high marks to the company’s price-earnings ratio of 9.17.
  3. Unifi (UFI) processes and sells yarn. The stock’s price-sales ratio of 0.72 earns high marks under the Kenneth Fisher-based screen, and the Benjamin Graham-inspired investment model likes Unifi’s liquidity (current ratio of 2.81) and price-book ratio of 1.43.
  4. LG Display (LPL) manufactures thin-film transistor liquid crystal display and other display panel technologies. The James O’Shaughnessy-based model likes its healthy and consistent earnings growth, and the Joseph Piotroski-inspired screen gives a thumb’s up to positive operating cash flow of $2.48 billion.
  5. Argan (AGX)provides engineering and consulting services to the power generation and renewable energy markets. The Joel Greenblatt-based screen favors AGX’s earning yield of 19.62%, which ranks it among the top 20 stocks in our database.