Luke Wiley and his 52-week low formula
“The 52-week low formula” is a stock investment strategy created by Luke Wiley, senior vice president of investments at UBS’s Wiley Wealth Management Group in Cincinnati. His book, entitled The 52-Week Low Formula: A Contrarian Strategy That Lowers Risk, Beats the Market and Overcomes Human Emotion, combines some of the most successful investing formulas from some of the world’s foremost investors, including Warren Buffett and Michael Porter. The goal of his strategy is to find gems that have fallen out of the investor spotlight.
Five Criteria to Find a Gem
Throughout his career, Wiley has identified five key criteria for determining if a company is likely to bring an investor positive returns. As with most investments, it is the combination of these five qualities that make the stocks perform. The five characteristics are:
1. Competitive advantage,
2. Free cash flow yield,
3. Return on invested capital,
4. A long-term debt to free cash flow ratio and,
5. The cornerstone of it all, a 52-week low in price.
Wiley believes that if the first four criteria are met, the company will rebound from the low; the current price is the key to the simple motto of ‘buy low, sell high’.
Wiley’s Background and Credentials
Wiley has a BBA from the University of Cincinnati College of Business. He’s also a certified financial planner (CFP) and chartered retirement planning counsellor (CRPC). Before starting at UBS, he worked for 12 years at Merrill Lynch as a senior investment advisor.
→ Read more about Luke Wiley’s investing strategy on meetinvest and see how a portfolio would have performed using his strategy.