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Investing Strategies / It's Earnings That Count


Subject:  Re: American Eagle's Intrinsic Value Estimate Date:  11/9/2005  11:26 AM
Author:  abFatPitch Number:  561 of 1817

...then you will see American Eagle scores highly. The Magic Formula screen looks for companies that possess high earnings quality (return on capital) and low price (high pretax earnings yield).

Hello Hewitt. I am also an AEOS owner.

I was sifting through the Magic Formula screener and was mostly finding companies that had recent past success but their futures were considerbaly more in question. Is Greenblatt's screener just backwards looking and if so, do you think you might get a fair number of underperformers this way?



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