Jordan Kimmel

Jordan Kimmel

Jordan Kimmel holds a BA in Economics and an MSc in Urban Policy Sciences from the State University of New York at Stony Brook. Kimmel was a first vice-president at Dean Witter and an account executive at Paine Webber and A.G. Edwards. He is currently Market Strategist for National Asset Management (NAM), an affiliate of National Securities Corp, one of the oldest and largest independent broker dealers in the US.

Kimmel appears regularly on ABC, CNBC and Fox Business News, and hosts his own weekly radio show, ‘Profitable Investing with Jordan Kimmel’, on the VoiceAmerica Business Network. He is quoted frequently in national newspapers and is a speaker at financial conferences.

Kimmel outlined the MAGNET Stock Selection Process in his book Magnet Investing.

Summary

Kimmel blends value, growth and Momentum investing styles into a singular approach, which he’s termed the MAGNET Stock Selection Process.

The MAGNET approach has been called “CAN SLIM at a reasonable price”. The CAN SLIM approach is based on William O’Neil’s analysis of the 500 companies with the biggest price increases between 1953 and 1993. O’Neil quantified the characteristics of these stocks to form the CAN SLIM approach, which focuses primarily on earnings and price Momentum. Although MAGNET has some similarities with William O’Neil’s CAN SLIM approach, MAGNET emphasises value and a focus on revenue growth instead of earnings growth.

 

The philosophy

A MAGNET stock, according to Kimmel, offers a blend of technical and fundamental characteristics “that pull investors into shares, as though by magnetic attraction, resulting in rapid price increase”. Kimmel believes the MAGNET process “encompasses the best of the Momentum aspects of the market, while demanding the downside protection of a value approach and insisting on top-line revenue growth”.

 

The MAGNET acronym is as follows:

M – Management - must be outstanding; Momentum must be improving

A – Acceleration - earnings, revenues and margins

G – Growth rate - must exceed valuation

N – New product or management - may be the driver

E – Emerging industry or product - creates opportunity

T – Timing - needs to be right (large price increase expected)

Success Formula Magnet - Simple screen

  1. MktCapM is >= US$ 300 million (basis year 2000) adjusted yearly
  2. Est P/E ratio for next year <= Est EPS growth rate % * 0.5
  3. T12M Sales Growth Rate % over last 4 quarters >= 15
  4. Rank all stocks according to the highest 13-week Relative Price Strength (13w RPS)
  5. Rank all stocks according to the highest 52-week Relative Price Strength (52w RPS)
  6. Take the top 200 stocks with the smallest sum [rank (13w RPS ) + rank (52w RPS )]

Hypothetical performance back-tested

Data source: Bloomberg, Calculations: meetinvest

Disclaimer

Hypothetical performance is not necessarily indicative of future results. No representation is being made that any action will achieve profits or losses similar to those displayed. The result may be overstated as neither transaction costs nor bid/ask spreads nor slippage have been considered. Output equally weighted with maximum 5% allocation per position and rebalanced monthly. Holdings are systematically replaced when the screening criteria are not met anymore. No additional buying or selling rules (technical analysis) have been employed.

Historical monthly relative performance

How to read this graph:
A green bar shows how much the guru strategy outperformed the benchmark index in a particular month. A red bar shows how much the guru strategy underperformed the benchmark index in a particular month.

Data source: Bloomberg, Calculations: meetinvest

Disclaimer

Hypothetical performance is not necessarily indicative of future results. No representation is being made that any action will achieve profits or losses similar to those displayed. The result may be overstated as neither transaction costs nor bid/ask spreads nor slippage have been considered. Output equally weighted with maximum 5% allocation per position and rebalanced monthly. Holdings are systematically replaced when the screening criteria are not met anymore. No additional buying or selling rules (technical analysis) have been employed.

Historical portfolio turnover

Data source: Bloomberg, Calculations: meetinvest

Books

Success Formula Magnet - Complex screen

  1. MktCapM is >= US$ 300 million (basis year 2000) adjusted yearly
  2. Float Shares (%) held by institutions >= 5%
  3. Latest Quarterly Current Ratio >= 1.5
  4. Latest Quarterly Debt to Equity ratio <= 40
  5. T12M EPS growth rate % over last 4 quarters >= 20
  6. T12M Sales Growth Rate % over last 4 quarters >= 20
  7. LF Price to Sales ratio < industry’s mean
  8. Rank all stocks according to the highest 13-week Relative Price Strength (13w RPS)
  9. Rank all stocks according to the highest 52-week Relative Price Strength (52w RPS)
  10. Take the top 200 stocks with the smallest sum [rank (13w RPS ) + rank (52w RPS )]

Hypothetical performance back-tested

Data source: Bloomberg, Calculations: meetinvest

Disclaimer

Hypothetical performance is not necessarily indicative of future results. No representation is being made that any action will achieve profits or losses similar to those displayed. The result may be overstated as neither transaction costs nor bid/ask spreads nor slippage have been considered. Output equally weighted with maximum 5% allocation per position and rebalanced monthly. Holdings are systematically replaced when the screening criteria are not met anymore. No additional buying or selling rules (technical analysis) have been employed.

Historical monthly relative performance

How to read this graph:
A green bar shows how much the guru strategy outperformed the benchmark index in a particular month. A red bar shows how much the guru strategy underperformed the benchmark index in a particular month.

Data source: Bloomberg, Calculations: meetinvest

Disclaimer

Hypothetical performance is not necessarily indicative of future results. No representation is being made that any action will achieve profits or losses similar to those displayed. The result may be overstated as neither transaction costs nor bid/ask spreads nor slippage have been considered. Output equally weighted with maximum 5% allocation per position and rebalanced monthly. Holdings are systematically replaced when the screening criteria are not met anymore. No additional buying or selling rules (technical analysis) have been employed.

Historical portfolio turnover

Data source: Bloomberg, Calculations: meetinvest

Books

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